Broadcom Says $121 Billion Qualcomm Bid Is "Best and Final"

Broadcom said its $121 billion acquisition proposal for Qualcomm is the “best and final“ offer after the target’s board unanimously rejected the sweetened bid, likely leaving the future of the hostile takeover bid to be decided by shareholders next month, according to Bloomberg.

Broadcom CEO Hock Tan urged Qualcomm to meet this weekend to discuss the $82 a share offer and dangled the prospect of an $8 billion reverse termination fee in a letter to Paul Jacobs, chairman of the board. Tan said he was “astonished“ the target wasn’t willing to meet until Tuesday, after the companies are scheduled to meet with proxy advisers Glass Lewis and ISS.

The offer “materially undervalues“ Qualcomm and "falls well short of the firm regulatory commitment“ needed to gain approval for such a transaction, the San Diego-based company said in a statement. The deal would take the form of $60 in cash and the remainder in Broadcom shares, a bump of 17 percent from its opening offer in November of $70 a share, which Qualcomm also rejected.

Qualcomm’s second dismissal of Broadcom’s approach puts the focus on a March 6 shareholder vote on whether to replace the smartphone-chipmaker’s board with Broadcom’s own nominees. The vote will represent a choice between Broadcom’s strategy, under Tan, of acquiring companies and focusing on boosting profits, or Qualcomm management’s promise of future growth fueled by investment in new products and technology.

"Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector," Jacobs wrote in an open letter to Broadcom’s Tan.