Qualcomm on Monday sent yet another open letter to Broadcom, snubbing the recently lowered offer by once again asserting it's materially undervaluing its assets. While the San Diego, California-based tech giant made the same claim on multiple occasions, its latest correspondence with its unsolicited suitor sheds more light on the matter, revealing that Broadcom's valuation of the firm is based on a period that saw Qualcomm's valuable licensing business face temporary "challenges" that "masked continued strong performance" of its semiconductor division, according to the chipmaker. The setbacks Qualcomm is referring to recently came in the form of multiple clashes with antitrust authorities around the world, as well as its high-profile legal battle with Apple over patent royalties.
Qualcomm Chairman Paul E. Jacobs wrote that the company remains confident in the success of both its immediate and long-term business plans meant to create substantial shareholder value going forward. Broadcom's current $117 billion bid has hence been deemed insufficient, as was its previous $121 billion offer which was lowered after Qualcomm strengthened its acquisition agreement with Dutch NXP Semiconductors. Qualcomm's antitrust issues, problems with Apple, and the prolonged nature of its NXP takeover are all believed to have played part in Broadcom's decision to attempt purchasing the chipmaker, according to some industry watchers who speculate the Singapore-based tech giant sensed the timing for doing so is right as Qualcomm's troubles may have annoyed enough stakeholders to convince the majority to sell the firm.
Qualcomm's investors will have a chance to do so next Tuesday when the company's annual shareholder meeting is scheduled to take place. Broadcom will attempt a coup of the firm's board on the occasion by presenting six nominees meant to replace the majority of Qualcomm's eleven-man leadership, all of whom are prepared to sell the chipmaker under the current proposal amounting to $79 per share, i.e. $57 in cash and a $22 equity payment from the combined entity. If completed, the deal would be by far the largest acquisition in the history of the technology industry, being nearly double the value of Dell's $67 billion EMC purchase from 2015. Qualcomm's latest letter acknowledged Broadcom made some additional concessions to lower the regulatory concerns surrounding the potential consolidation during the parties' second meeting on Friday but reiterated the deal as a whole is still far from acceptable.