Chip maker Broadcom Ltd made an unsolicited $103 billion bid for Qualcomm Inc on Monday, setting the stage for a takeover battle that could reshape the industry at the heart of mobile phone hardware.
Qualcomm said it would review the proposal but the San Diego-based company is inclined to reject the bid as too low and fraught with risk that regulators may reject it or take too long to approve it, people familiar with the matter told Reuters.
Broadcom Chief Executive Hock Tan, who turned a small, chipmaker into a $100-billion company based in Singapore and the United States, told Reuters he would not rule out a proxy fight to convince shareholders to replace the board and accept the offer.
“We are well advised and know what our options are, and we have not eliminated any of those options,” said Tan, who has pulled off a string of deals over the past decade. “We have a very strong desire to work with Qualcomm to reach a mutually beneficial deal.”
A combined Broadcom-Qualcomm would become the dominant supplier of chips used in the 1.5 billion or so smartphones expected to be sold around the world this year. It would raise the stakes for Intel Corp, which has been diversifying from its stronghold in computers into smartphone technology by supplying modem chips to Apple Inc.
Qualcomm shareholders, who have watched their investment sour over the past year in the face of a patent dispute with Apple, would get $60 in cash and $10 per share in Broadcom stock in a deal, according to Broadcom’s proposal. Including debt, the transaction is worth $130 billion.
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