The board of directors at Qualcomm Inc. (QCOM) late Thursday, Feb. 8, rejected an $82 per share offer from Broadcom Ltd. (AVGO) . The offer from Broadcom and CEO Hock Tan valued the target's equity at about $146.4 billion, a price tag Qualcomm's board said did not properly value the company.

"The board has unanimously determined that your amended offer materially undervalues Qualcomm and falls well short of the firm regulatory commitment the board would demand given the significant downside risk of a failed transaction," Qualcomm said in a statement. 

Qualcomm, however, did offer up a glimmer of hope for the hostile bidder, noting that it was willing to meet with Broadcom to see if it can address "serious deficiencies in value and certainty." In its statement, Qualcomm said its board was "committed to exploring all options for maximizing shareholder value," and would be open to meeting with Broadcom to allow it to explain how it would bridge "gaps in both value and deal certainty," which include "significant regulatory hurdles." 

The rejection comes after Broadcom, a holding in Jim Cramer's Action Alerts PLUS charitable truston Feb. 5 said it had made its "best and final" bid, offering $82 a share in cash and stock, an improvement on its previous bid issued in November of $70 a share in cash and stock.

Broadcom's Hock Tan
Broadcom's Hock Tan

There are serious questions about whether the deal would be approved by regulators in the U.S. and abroad. For example, the rejected bid comes as the Federal Trade Commission last month made a second request for information on Broadcom's offer, a move that puts a spotlight on the level of antitrust scrutiny the potential deal would face.

Another complication to the deal's approval -- Qualcomm is in the midst of completing a $47 billion acquisition of NXP Semiconductors NV (NXPI)  another AAP holding. That acquisition effort is being complicated itself by Elliott Management Corp.'s Paul Singer, an activist investor, who is seeking to have Qualcomm pay more than its agreed upon $110 a share to buy NXP.

Broadcom is also seeking to take over the board of Qualcomm with an 11-person slate of directors, with a focus on pressuring the company to accept its hostile acquisition offer.

Of the $82 per share, about $60 was to be paid in cash the remainder would be stock. The buyer would assume $25 billion in debt.

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