Broadcom on Monday increased its unsolicited bid for Qualcomm by approximately 24-percent, having offered $82 per share of the San Diego, California-based semiconductor firm. The value of the proposal is now north of $121 billion, with Broadcom seeking the largest tie-up in the history of the technology industry that's almost twice the size of Dell's 2015 acquisition of EMC, still the most valuable such deal ever completed. Broadcom officially labeled the bid as the "best and final" it's prepared to make, adding that it represents a 50-percent premium on Qualcomm's unaffected stock price on November 2.
The development is in line with recent reports about Broadcom's insistence to acquire Qualcomm and represents a notable departure from Broadcom CEO Hock E. Tan's modus operandi who completed many major tech deals over his career but rarely upped his initial offer by any significant margin. The increase itself is only coming in the form of stock of the theoretical combined entity, with the cash part of the equation still amounting to $60 per share that's promised to rise if Broadcom was unable to complete the move in 12 months. The $22 in stock per every Qualcomm share offered by Broadcom was presented as a unique opportunity for Qualcomm's investors, with the suitor insisting it can create significant value through the consolidation. Qualcomm is presently in the process of reviewing the bid and won't comment on it until it does, though some analysts believe the new offer is a compelling one, especially as Broadcom also vowed to an increased and "significant" termination fee in what it deems is an unlikely scenario in which it doesn't end up completing the merger due to regulatory roadblocks.
Just like the first bid, the new one still stands regardless of the outcome of Qualcomm's attempted $38 billion acquisition of NXP Semiconductors, with the only main condition being that Qualcomm doesn't postpone or adjourn its annual shareholder meeting past its currently scheduled date of March 6. Broadcom is presently attempting to have Qualcomm's board overthrown at the same meeting and will hence use the revised deal as leverage to try to convince more investors to vote for its director nominees. The new bid also addresses Qualcomm's regulatory concerns that served as the basis for rejecting the first offer, with the company claiming Broadcom couldn't realistically complete the tie-up in less than 18 months, provided that ever happens at all. Qualcomm also claimed a $105 billion offer severely undervalues its assets but it remains to be seen whether it will deem the revised price fair. Broadcom previously said Qualcomm's regulatory concerns are unfounded and intentionally vague, stressing that it never failed to close a signed acquisition throughout its M&A history worth nearly $50 billion.