Broadcom Ltd. (AVGO) said Monday, Feb. 5, it made a "best and final" offer to rival Qualcomm Inc. (QCOM) in the latest turn in the $130 billion hostile takeover battle between the two global chipmakers.
Broadcom said it would pay $82 a share ,in cash and stock, for Qualcomm, a price that would represent a 50% premium to the stock's closing price on Nov. 2, the day before media reports first linked the two groups in takeover talks. Broadcom said its new bid was a "56% premium to Qualcomm's unaffected 30-day volume-weighted average price."
"Broadcom believes this offer is vastly superior to Qualcomm's stand-alone prospects, with or without the closing of the NXP (NXPI) transaction, and remains hopeful the Qualcomm board of directors will act responsibly on behalf of Qualcomm stockholders and engage with Broadcom on this offer without further delay," the company said in a statement.
Qualcomm shares were indicated 3.16% lower in premarket trading Monday, suggesting an opening bell price of $64.10 each, a move that would trim its gains from Nov. 2 to around 20%. Broadcom shares were marked 1.37% higher at $238.7 each in premarket trading.
Qualcomm said it would "eview the revised proposal to determine the course of action it believes is in the best interests of the Company and its stockholders" but wouldn't comment until that review was complete.
San Diego-based Qualcomm has said Broadcom's repeated takeover attempts would face daunting regulatory scrutiny around the globe and require destructive divestitures. Broadcom has insisted the claims are "simply unfounded, misleading and a disservice" to shareholders.
Qualcomm's $47 billion acquisition of NXP Semiconductors, meanwhile, faces similar criticism from Paul Singer's Elliott Management Corp.
In a letter to shareholders earlier in January, the activist fund argued that Qualcomm's bid shortchanges NXP shareholders and lacks a premium. Elliott cited chip valuation data from Broadcom CEO Steve Mollenkopf's own presentation about Broadcom's hostile bid.