Bloomberg reported that according to informed sources, Broadcom did not plan to propose a $105 billion acquisition of Qualcomm’s proposal before proposing to replace the board member next week.
Broadcom believes that Broadcom is not expected to increase its offer of $70 per share before the Qualcomm board meeting in March. An informed source, who declined to be named, said that Broadcom plans to nominate directors to join the Qualcomm board of directors before the December 8 deadline.
For the time being, Broadcom and its tough-talking attitude CEOHockTan will directly submit representations to Qualcomm shareholders in order to complete the largest purchase transaction in the history of science and technology. This is the first step in HockTan’s exertion of more pressure on his own goals, or forcing Qualcomm’s management and board of directors to explain to shareholders why the largest mobile phone chip maker company is best to go alone.
An informed source said that Broadcom believes that Qualcomm shareholders strongly support the merger, and they still hope to have a friendly contact with Qualcomm. Informed sources warn that any time the quotation is raised is uncertain and may change at any time.
Qualcomm's board of directors has rejected the $70 offer. Investors said that if the offer rises at least 10 US dollars, Qualcomm will still sell.
NXP obstacles
Strategically speaking, Broadcom expressed its willingness to conduct friendly negotiations, but it may postpone providing more services until Qualcomm’s acquisition of NXP Semiconductors is resolved. This $47 billion deal is being shelved by regulators. According to informed sources, Qualcomm would have to persuade the shareholders of the Dutch company to bid 80% of the shares held by them before the end of this year. The current trading price of the stock is higher than the issue price, which means that they may raise prices.
Qualcomm, headquartered in Santiago, declined to comment, and Broadcom did not respond immediately.
This deal is HockTan’s latest move to reshape the semiconductor industry. He hopes that Qualcomm’s industry-leading cell phone chip technology can add more chips for his growing “franchiseâ€â€”technical capabilities, which he believes are increasingly important for electronics manufacturers.
The Battle of Apple
Qualcomm is surrounded by various challenges that are eroding its market value. The company is embroiled in a fierce dispute with Apple over the phone technology patent fees that iPhone makers have refused to pay. Regulatory moves around the world are threatening its lucrative patent licensing business.
Qualcomm executives believe that this fight with Apple is just a commercial negotiation that will eventually be resolved and will regain billions of dollars in royalties.
Under the leadership of HockTan, Broadcom successfully completed a series of acquisitions, which led to a substantial increase in its share price. Since 2009, the company's share price has risen by more than 1600%. Wall Street has generally expressed its appreciation for HockTan's vision. HockTan usually buys companies and then focuses on their core competencies while abandoning expansion projects and reducing related costs.
If Qualcomm's management and board of directors continue to compete with Broadcom, they will have to convince investors that they plan to convert the company’s dominant position in the phone chip into servers, personal computers and auto parts, and will soon be get payback.
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