"It is the Board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the Company's leadership position in mobile technology and our future growth prospects", Qualcomm executive chairman Paul Jacobs said in a press release. At the time, Bloomberg sources claimed that Qualcomm's board would likely reject the deal.
Qualcomm Chief Executive Steven Mollenkopf has spent the past few days soliciting feedback from Qualcomm shareholders, and feels that Broadcom's $70-per-share bid undervalues the company and does not price in the uncertainty associated with getting the deal approved by regulators, according to the sources. The sources said Broadcom was preparing to submit a slate of directors by Qualcomm's December 8 nomination deadline.
Broadcom had also said this proposal of buying Qualcomm would stay put irrespective of the outcome of the latter's pending acquisition of NXP.
It's not clear how Broadcom will respond. Meanwhile, Qualcomm is a larger company than Broadcom is - it earns $23 billion a fiscal year (vs. $16.93 billion earned by Broadcom) and it has 33,800 employees (vs. 15,700 employed by Broadcom).
Qualcomm provides chips to carrier networks to deliver broadband and mobile data. Qualcomm has more, including the soon to finish NXP acquisition, a great patent portfolio, high-end phone SoC leadership, Modem and WiFi leadership in 4G and 5G and even automotive, the world's first 10nm server and Windows 10 holding great Snapdragon potential.
The right price for Qualcomm could be between $80 and $85 per share, and Broadcom could go up to $90, Susquehanna analyst Christopher Rolland told Reuters.
Broadcom shares are now up 0.3% on the day; Qualcomm is up 1.8%, at session highs.
Shares of Qualcomm have been declining in value in the recent quarters, which is why Broadcom made its proposal.