Qualcomm rejects Broadcom's $103 billion offer

But Qualcomm's beaten down stock price showed far less optimism among investors that a deal could be consummated quickly.

The technology sector's largest takeover ever has been denied after chipmaker Qualcomm rejected a $130bn (€111.43bn) buyout offer from Broadcom.

San Diego-based Qualcomm is going to reject a $103 billion purchase offer made by rival Broadcom, according to a Reuters report.

"The board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty", Qualcomm presiding director Tom Horton said in a statement.

The source said Qualcomm's board of directors could huddle up on Sunday to examine the unsolicited acquisition bid and think of its strategy.

ZDNet has reached out to Broadcom and will update if we hear more.

"We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G", he said, referring to the fifth generation wireless networks in the works. We are not sure whether Broadcom can initiate a proxy fight to get the deal approval from Qualcomm's board.

Shortly after Qualcomm issued its statement on Monday turning down the $70-per-share bid, Broadcomm fired back nearly immediately with an announcement of its own maintaining that its offer was the best the embattled Qualcomm could hope to get.

Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle.

Both semiconductor companies did not immediately respond to requests for comment. Broadcom's (avgo) shares, up nearly 50% so far this year, were largely unchanged on Monday at $264.28. Now we'll have to see if Broadcom returns with a bigger offer (though its initial proposal represented a 28% premium over Qualcomm's share price before Broadcom's plans were reported in the press) or simply gives up. Regulators are already scrutinizing Qualcomm's $38-billion acquisition of automotive chipmaker NXP Semiconductors NV.

  • Joey Payne