Analysts believe Broadcom's acquisition of Qualcomm is a must, and they may easily raise the offer to $ 80 or $ 90 a share, pushing the deal to a final buy-out of $ 130 billion.
Seriously underestimated
QUALCOMM board chairman Paul Jacobs said in a statement on Monday that Broadcom's takeover bid seriously underestimated Qualcomm's leadership in mobile technology and our future growth prospects. "Clearly Jacob's This statement opens the door for Broadcom to increase its offer.
Broadcom chief executive Hock Tan, known for his rich M & A experience in the chip industry, responded immediately after Qualcomm issued a statement saying that Qualcomm is still "still fully committed to ' Buy Qualcomm, and said Qualcomm shareholders are very interested in the deal. 'Many shareholders have already expressed their intention to us to Qualcomm to discuss the tender offer with us and we still have a strong desire to be able to work with Qualcomm's board of directors and management To cooperate. 'Hawk Tan said.
This is an undisguised threat designed to reveal to the outside world: Qualcomm will launch a hostile takeover if necessary.
Analysts said Broadcom's acquisition of Qualcomm is a must, and they may easily raise their offer to $ 80 or $ 90 a share, pushing the deal to a final $ 130 billion and still recover from the deal In the benefits.
Hawk Tan has seen cutting costs in the industry, such as through corporate mergers and acquisitions, spending cuts and reductions in research and development, etc. Broadcom has said to analysts and investors that it can cut $ 3 billion from Qualcomm's payouts by acquiring Qualcomm, And boosted its operating profit by about 30%, but that did not take into account royalty disputes between Apple and Apple, which could cost the company $ 3 billion a year, but Hawk Tan hinted they would soon Get these things done.
Raise the price
'Our calculations show Broadcom still has a lot of room to buy Qualcomm,' said Stacy Rasgon, a Bernstein analyst at Market Analyst, on Monday in an investment report "It may be more reasonable to raise quotes on a timely basis, perhaps at the same time as more radical ones."
Mike Walkley, analyst at Canaccord Genuity, another market research firm, said: "We think Broadcom may raise its bid." Walkley said Monday's signal from Qualcomm's battle with Broadcom that "Qualcomm's licensing business Still underestimated, both companies consider Qualcomm to be able to resolve licensing issues with Apple and another major OEM.
Amit Daryanani, an analyst with RBC Capital Markets, predicts that if Hawk Tham follows his usual course, he may soon get rid of part of Qualcomm In return for using proceeds to pay off debt and improve cash flow, Delaney said that in addition to Qualcomm's market-leading mobile communications chips, other divisions, including licensing patents, could be "retained, ripped off or shut down."
Broadcom not only solves the problem of customer disputes, but also addresses various regulatory issues by implementing radical changes in the (Qualcomm) business model, "Delainelli added.
However, the recent decline in Qualcomm's share price shows investor optimism that the deal may be completed rapidly well below expectations, battles with Apple and subsequent earnings plummet, as of the end of October this year, Qualcomm shares fell 20% to 51 USD.
Monday US stock market, Qualcomm shares rose 3.07% approaching 66 level, but still lower than the Broadcom $ 70 offer.This year, Broadcom shares rose nearly 50% on Monday, the US stock market, Broadcom shares unchanged from the previous day, To close at 264.28 US dollars.