Broadcom has made what it says is its 'best and final' bid to acquire all of the outstanding shares of common stock of Qualcomm Incorporated. The deal would see Qualcomm stockholders receive an aggregate of $82.00 per each Qualcomm share, consisting of $60.00 in cash and the remainder in Broadcom shares.
This significantly improved offer was unanimously approved by Broadcom’s board of directors and represents a 50% premium over the closing price of Qualcomm common stock on November 2, 2017 – the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 56% to Qualcomm's unaffected 30-day volume-weighted average price.
Broadcom’s previous proposal in November 2017 valued the deal at $130 billion, with $70 per share to be received by Qualcomm stockholders, consisting of $60 in cash and $10 in Broadcom shares, representing a 28% premium over the closing price of Qualcomm common stock on November 2, 2017 (see Broadcom makes $130B bid for mobile chip firm Qualcomm). This offer was rejected by the Qualcomm board (see Qualcomm board unanimously rejects Broadcom's bid), which felt it ‘significantly undervalued’ Qualcomm.
In a letter to Qualcomm detailing the revised offer, Hock Tan, president and chief executive officer said: ‘Our proposal includes substantially more Broadcom stock, which will allow Qualcomm stockholders a greater opportunity to participate in the upside created by the combined company's strategic and operational advantages. Broadcom's track record demonstrates our ability to consistently accelerate share price appreciation following acquisitions and indicates a substantial likelihood that we will exceed our synergies expectations.’
The company also stated that it would be prepared to invite executive chairman and chairman of the board Paul Jacobs and one other current Qualcomm director to join the combined company's board upon completion of the transaction. However, it said it would withdraw the offer and cease pursuit immediately following Qualcomm’s upcoming annual meeting unless a definitive agreement is agreed or the Broadcom-nominated slate is elected.