It is not the same thing to get a deal done and a Broadcom deal should now bear in mind the benefits of the former situation.
This long weekend has brought even more headwinds to Broadcom's acquisition of Qualcomm Inc. Q: On the one hand, Broadcom's efforts to replace Qualcomm's board have been more or less favored by shareholder consultancies Glass Lewis and Institutional Services. On the other hand, QUALCOMM raised its offer for NXP Semiconductors NX (NXPI), significantly raising the possibility of reaching the deal.Carton increased the transaction value by 16% of the win, including Elliott Management Corp., several NXP Semiconductors, the key activist investors, these investors have been asking for a higher offer.
Broadcom had previously warned that if Qualcomm increased the price of the acquisition of NXP Semiconductors may lead the company to abandon the proposed acquisition of Qualcomm.Butong Tuesday morning criticized the move is Qualcomm NXP Semiconductors shareholders transfer value and pointed out that the The company is now evaluating various options. Broadcom shares rose as much as 2% in early trading Tuesday, closing 0.3% higher at $ 249.62.
The rise in Broadcom's shares appears to be a vote of approval for the company to abandon Qualcomm's bid, with Broadcom investors initially backing Qualcomm's proposal, and if the deal is completed, it will create the world's third-largest chip company by revenue. The deal will face close scrutiny by regulators, especially as several Chinese smartphone makers have voiced their opposition, with Broadcom streaking 10% below the company's announcement of Qualcomm's first bid before Tuesday's opening, The same period Philadelphia Semiconductor Index was flat.
The fact is Broadcom does not need the deal, and Broadcom's performance was already stunning before its acquisition of Qualcomm, which led Broadcom to a strong position in some of the key chip markets with rising free cash flow. So favored by Wall Street, proposed acquisition of Qualcomm, the coverage of research Broadcom analyst, about 93% given its buy rating, far more than any other large semiconductor company.As Bernstein's Stacy Rasgon pointed out, Broadcom's history is very clear .
The acquisition of Qualcomm may affect this image, and there has been a fundamental difference in how the two chipmakers operate, giving rise to questions about the extent to which they can be consolidated. Broadcom has so far barely publicly stated how its plans are reshaped Qualcomm to bring most of the profits of the authorized business, most of the other issues are not quite sure.
Broadcom may choose to maintain its current $ 82 "best and final offer," awaiting the Qualcomm shareholders' vote on March 6. This Broadcom strategy may have a role given Qualcomm's current share price is about 25% below its quotation.
However, it is worth mentioning that Institutional Shareholder Services did not fully recognize Broadcom's proposed alternative shareholder list and described Broadcom's acquisition proposal as a "reasonable starting point." At the same time, Broadcom investors seem to be envisioning a A better outcome.