Qualcomm rejected an unsolicited, $103 billion offer from Broadcom, saying that the proposal is significantly undervalued and that a tie-up between the massive chipmakers would face substantial regulatory resistance.
Qualcomm shares rose 0.8 percent, to $65.11, while Broadcom was off by 1 percent, at $262.24 a share, after the rejection announcement. Another tactic Broadcom could use is to nominate directors for Qualcomm's board ahead of the company's annual general meeting in 2018.
The bid "significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects", Paul Jacobs, chairman and son of Qualcomm co-founder Irwin Jacobs, said in a statement.
Broadcom presented a US$130 bn offer for Qualcomm, its adversary chip producer.
Qualcomm CEO Steve Mollenkopf added that the U.S. chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas.
In an email, a Qualcomm spokesperson said the company "won't have any comment beyond this statement".
In turning down the bid, Qualcomm's chief executive Steve Mollenkopf said management was "confident in our ability to create significant additional value for our stockholders".
On the other hand, Hock Tan, Broadcom CEO who said earlier this month he would revive his company's presence in the United States from Singapore, said he is open to initiating a takeover battle. Amid all the fighting with Apple, and accompanying loss of revenue, Qualcomm's shares had fallen 20% this year through late October to $51 before rumors of Broadcom's interest leaked. Its own board similarly thinks that the offer undervalues the company and NXPs shares were trading above Qualcomms offer.
It comes as Qualcomm seeks a $47 billion acquisition of Dutch rival NXP, a deal that is the subject of an European Union anti-trust probe.
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