ZCZC
BCN-03
US-IT-MERGER-QUALCOMM-NXP-BROADCOM
Broadcom lowers offer for Qualcomm as takeover saga continues
WASHINGTON, Feb 22, 2018 (BSS/AFP) – Singapore-based Broadcom said
Wednesday it was cutting its offer price for mobile chip maker Qualcomm in
the wake of the US firm’s increased bid for Dutch rival NXP.
Broadcom reduced its offer to $79 a share, which would still be the
largest-ever deal in the tech sector if completed at an estimated value of
nearly $117 billion.
The move came amid a closely watched hostile bid for Qualcomm which could
reshape the fast-evolving sector of chips for smartphones and connected
devices.
A Broadcom statement said the offer was reduced because “Qualcomm’s board
acted against the best interests of its stockholders by unilaterally
transferring excessive value to NXP’s activist stockholders.”
Qualcomm, the dominant maker of smartphone chips, has moved to fend off
Broadcom’s hostile takeover efforts and last week rejected the latest offer
of $82 a share as too low.
“Broadcom’s reduced proposal has made an inadequate offer even worse
despite the clear increase in value to Qualcomm stockholders from providing
certainty around the NXP acquisition,” the California company said in a
released statement.
Qualcomm argued that the $79-per-share offer undervalues the company and
fails to take into account strategic and financial benefits it would gain
from acquiring NXP.
Qualcomm on Tuesday raised its offer for NXP to an estimated $43 billion,
aiming to alleviate concerns of some NXP investors and seal the tie-up which
would make a Broadcom acquisition of Qualcomm less enticing.
Broadcom said Wednesday it remained committed to acquiring Qualcomm and
its cash-and-stock offer would revert back to $82 per share should Qualcomm
fail to acquire NXP.
The Singapore firm accused Qualcomm’s board of acting against shareholder
interest “by unilaterally transferring excessive value to NXP’s activist
shareholders.”
“Broadcom remains confident that Qualcomm’s stockholders will continue to
support its proposal to acquire Qualcomm,” Broadcom said in a statement.
Qualcomm is due to hold an annual meeting March 6 at which Broadcom has
nominated six people to replace the majority of Qualcomm’s board of
directors.
Broadcom’s original offer for Qualcomm came days after CEO Hock Tan
visited the White House and told President Donald Trump the company would be
moving back to the United States.
BSS/AFP/HR/0935