Broadcom slashed its unsolicited bid for Qualcomm by $4 billion, the Singapore-based tech giant said Wednesday, adding that the move is meant to be a response to the revised NXP acquisition deal which was unveiled yesterday. As Qualcomm raised its offer for the Dutch semiconductor firm by $4 billion, its aggressive suitor has now lowered its bid for the combined entity by the same amount, directly signaling it doesn't believe the original Qualcomm-NXP package to be worth more than its previous offer. The company said it will increase its bid back to $121 billion should Qualcomm be unsuccessful in acquiring NXP, indicating it believes the firm to be overpaying for its Dutch target.
The main purpose of the revised NXP bid was to deter Broadcom's interest by guaranteeing a lower return on its investment even if the technology giant manages to seize control of Qualcomm and make the approached company's investors less willing to participate in Broadcom's attempted coup of Qualcomm's board. Broadcom is now offering $57 in cash and $22 in its own shares per each Qualcomm stock, having reduced the cash amount of the previous offer by $3. Other terms of the deal remain unchanged, Broadcom said, describing its move as an act of good faith even though it criticized Qualcomm's increased bid for NXP as an unnecessary loss of value and not an act of a "responsible" board.
While Qualcomm has yet to officially respond to the development, its reaction will likely remain unchanged as its directors repeatedly claimed Broadcom's offer severely undervalues the chipmaker's assets and also comes with significant and likely insurmountable regulatory obstacles due to a wide variety of antitrust concerns it raises. The two are still fighting a proxy war over the proposed takeover that's expected to have its epilogue on March 6 when Qualcomm is scheduled to hold its annual shareholder meeting. Should Broadcom convince enough investors to vote for its own candidates to replace the majority of Qualcomm's board, the sale should be agreed momentarily, but if Qualcomm's existing directors remain in their seats, the now-$117 billion offer will officially expire and likely won't be revised in the near future, if at all.