In a response from Qualcomm's CBN reporter, the board of directors agreed that Broadcom's acquisition proposal seriously underestimated Qualcomm's value given its leadership in mobile technology and our future growth prospects.
November 6, the US communications semiconductor chip company Broadcom formally submitted an offer to Qualcomm, the transaction total more than 130 billion US dollars in the chip empire, Broadcom's name, though not as good as Qualcomm, Intel and Samsung giants loud, but in Over the past few years, this industry is indeed a force that can not be ignored.
Broadcom products are targeted at home, office and mobile environments and deliver voice, data and multimedia in these environments to customers including Samsung, Huawei, Cisco, HTC, etc. Qualcomm is the world's largest maker of handset chips with a number of chips patent.
Earlier news that Broadcom had expected high-level executives may refuse its offer, once Qualcomm rejected its $ 130 billion takeover bid, Broadcom and its consultants will be the way through proxy directly with Qualcomm shareholders 'negotiations.'
Board members unanimously rejected the Broadcom acquisition offer, Qualcomm this time to convey the key message to the outside world.
Qualcomm CEO Steve Molenkov said: "Compared with all the other companies in the semiconductor industry, Qualcomm is undoubtedly in the smart phones, Internet of things, automotive, computing and networking technologies have a better position." As we continue to sustain growth in these exciting areas and lead the way towards 5G, we are confident of creating significant additional value for our shareholders. "
Tom Horton, Qualcomm's managing director, said: "The board of directors and management team are particularly focused on creating value for Qualcomm shareholders.After a thorough evaluation and consultation with our financial and legal advisors, the board found Broadcom's proposal seriously undervaluing Qualcomm, and There is huge regulatory uncertainty and we fully believe that the tactics Steve and his team are implementing can create value for Qualcomm shareholders well above the offer. "
Paul Jacobs, Qualcomm's executive chairman and chairman of the board, said: "Due to its leadership in mobile technology and our future growth prospects, Broadcom's acquisition proposal seriously undervalues Qualcomm's value."
In fact, Broadcom has said in the past that it has received "high confidence letters" from Bank of America Merrill Lynch, Citibank, Deutsche Bank, JP Morgan Chase and Morgan Stanley that the investment banks are confident of providing the debt necessary for the transaction Financing. Bertone can see the determination of the acquisition.
Earlier this month, Broadcom's chief executive Chen Fuyang said he will relocate his corporate headquarters from Singapore to the United States and is willing to launch a takeover bid for Qualcomm.
In addition, private equity firm Silver Lake Partners has provided a $ 5 billion convertible debt financing commitment to Qualcomm, the existing shareholder of Broadcom.
'Two-way' started capital game war
Although Qualcomm rejected the Broadcom offer, it is clear from the position released by Broadcom that the tender offer will be a long-term war for both parties.
At the helm of Broadcom, chief executive officer Chen Fuyang is said to be the most aggressive M & A trader in the global semiconductor industry in recent years. In just a few years, he has acquired several bigger companies than himself and led Avago Technologies) revenue and share price more than tripled, while Broadway after the Anwar Googles in the name of 'Broadcom' in the semiconductor industry qualifying from the previous year's seventeenth jumped to fifth .
In a letter to Qualcomm's board, Chen Fuyang said the takeover offer is extremely attractive to shareholders and investors in both companies, and in particular to the stock market returns to Qualcomm shareholders, which Broadcom said is more attractive than the acquisition price QUALCOMM on November 2 closing price of $ 54.84 28% premium.
From the capital market point of view, Qualcomm is more disadvantaged party.
Although Qualcomm earlier acquired NXP Semiconductors' active placement of 5G, the acquisition was delayed due to regulatory reasons, while the performance of 4G business is also worrying.Recent quarterly earnings announcements that Qualcomm Q4 Net profit of 200 million US dollars, fell 89%.
At the China-US Entrepreneurs Dialogue held last week, though three Chinese mobile phone manufacturers, OPPO and vivo, reached a purchase intention of 12 billion U.S. dollars, the lawsuit with Apple will be affected for a long time Qualcomm's share price and performance.
'Qualcomm refused Broadcom, I agree, a good day, however, what to do with people?' A Huawei person commented on the first financial reporter, but some insiders Huawei, told reporters earlier, Broadcom Chen Fuyang attitude and tactics will give Qualcomm Exert more pressure, it is not difficult to predict the two sides will conduct more games in the future.
'At present, Qualcomm think the value is undervalued, that is, there is some room for negotiation.' The above-mentioned Huawei insiders told reporters.