QUALCOMM AND BROADCOM will meet on Valentine’s Day to discuss the potential marriage of the two firms.
Last week, Broadcom upped its offer for Qualcomm to $121bn after its earlier bids were rejected by the chipmaker.
Qualcomm, again, said it “unanimously” rejected Broadcom’s revised bid, again arguing that the offer “materially undervalues Qualcomm” and “falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction.”
According to Reuters, the two companies will meet for the first time this Wednesday, 14 February, to discuss the potential takeover. And, presumably, share a bowl of spaghetti in Lady and the Tramp fashion.
Before the meeting takes place on February 14th, the two companies are expected to meet proxy advisory firms ISS and Glass Lewis to discuss to argue why Qualcomm shareholders should back Broadcom in a vote scheduled for 6 March.
According to the report, Broadcom has agreed to hand over $8m to Qualcomm if antitrust regulators were to find problems with the deal and block it.
News of a meeting between the two firms comes after Qualcomm chairman Paul Jacobs last week invited Broadcom CEO Hock Tan to meet with him in a letter he penned to address his concerns about the potential deal falling through.
“It is indisputable that there are significant regulatory hurdles in your proposed transaction. It is also indisputable that if Qualcomm entered into a merger agreement and, after an extended regulatory review period the transaction did not close, Qualcomm would be enormously and irreparably damaged,” Jacobs said.
In his letter, Jacobs went on to discuss how Broadcom’s offers have undervalued the firm. He argued that the rival chipmaker has failed to take into account the firm’s NXP acquisition, nor the potential of the firm’s 5G technology.
“Your current proposal is inadequate as it materially undervalues Qualcomm. Your proposal ascribes no value to our accretive NXP acquisition, no value for the expected resolution of our current licensing disputes and no value for the significant opportunity in 5G,” he said.
“Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector.” µ
Source : Inquirer