Raising its offer to be 24 percent higher than the current share price shows how serious Broadcom is about this acquisition.
In November last year, Broadcom made a $105 billion bid to acquire Qualcomm. The offer would see each Qualcomm shareholder receive $60 in cash per share and $10 in Broadcom stock ($70 per share total). Qualcomm rejected the offer, with the board of directors unanimously turning it down stating it undervalued the company.
As Reuters reports, today Broadcom decided to try again by sweetening the deal. Rather than $70, Broadcom is now offering $82 per share with $60 in cash and $22 in Broadcom stock per share. The new offer takes the total over $121 billion and is a 24 percent premium on Qualcomm’s share price as of Friday last week.
The new offer shows how serious Broadcom is about the acquisition. It will certainly be very tempting for Qualcomm’s shareholders, but likely more so due to the difficulties the company is facing with regards to its major customer: Apple. Not only is Qualcomm fielding multiple lawsuits against the iPhone maker, but analysts predict 2018 iPhone models will exclusively use Intel modems instead of Qualcomm. That’s sure to hit the company’s bottom line
As Sascha explained back in November, Broadcom will kill Qualcomm if the acquisition goes ahead. However, with the future looking a little uncertain for the chip maker right now combined with a significant increase in the value of the offer on the table, Qualcomm’s directors may cave and agree to join Broadcom this time.
As far as Broadcom is concerned, the company is confident the acquisition will be completed within 12 months of an agreement being signed.