But any deal would need to pass muster with Qualcomm shareholders and could face regulatory scrutiny in the United States and other markets. "Qualcomm's "thanks, but no thanks" response to the unsolicited bid by Broadcom isn't surprising and we would be surprised if at this point, Broadcom didn't move forward with a proxy fight", Loop Capital analyst Betsy Van Hees told Reuters.
Qualcomm's board believes that Broadcom's proposal significantly undervalues Qualcomm given its leadership position in mobile technology and their future growth opportunity.
Analysts said Broadcom could easily raise its bid to $80 or $90 per share-or as much as $130 billion-and still make out well with the acquisition.
Broadcom quickly fired back a few hours later, saying it "remains fully committed" to buying Qualcomm.
USA semiconductor and telecommunications firm Qualcomm rejected a $103bn takeover bid from competitor Broadcom on Monday, saying the offer "dramatically" underestimated the value of the company. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G", said Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated.
Qualcomm said Monday that it's in a unique position to grow on its own.
Qualcomm's board of directors could meet as early as Sunday to review the unsolicited acquisition offer and decide on its strategy, the sources said. They also stated that Broadcom "undervalues" them. Qualcomm and Broadcom did not immediately respond to requests for comment. That's no small amount of money, and it would have ranked as the tech industry's largest acquisition ever. Qualcomm, famous for inventing 2G and 3G wireless network technology, now sells the mobile chips for smartphones and the radios that enable cellular communications. Broadcom's (avgo) shares, up nearly 50% so far this year, were largely unchanged on Monday at $264.28. After consulting with its financial advisors, the company concluded that Broadcom's $70-per-share proposal represents a significant undervaluation.