QualcommRemains Opposed To Offer -- WSJ

By Cara Lombardo and Ted Greenwald 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (February 17, 2018).

Qualcomm Inc. said Friday that while it is open to further discussions with Broadcom Ltd. it remains against the rival chip maker's "best and final" takeover offer because it still undervalues the business and doesn't adequately account for the risk of the deal falling through.

In a letter to Broadcom's chief executive, Qualcomm Chairman Paul Jacobs said it was encouraging that Broadcom participants in a Wednesday meeting seemed receptive to certain potential antitrust-related divestitures beyond those in the company's publicly filed $121 billion proposal announced Feb.5.

But Broadcom representatives appeared to resist other commitments that regulatory bodies are likely to require, Mr. Jacobs wrote. They declined to clarify their plans for Qualcomm's licensing business and sought to control that business between striking a deal and completing it, which may violate antitrust laws, he wrote.

Broadcom's bid for Qualcomm represents what would be the largest tech takeover ever. Both companies are key suppliers to the smartphone industry, and combined would be the world's third-largest chip maker by revenue.

Their meeting in New York included executives, directors and advisers from both sides and lasted for roughly two hours, spokesmen for the companies said.

Qualcomm's team included Mr. Jacobs and Chief Executive Steve Mollenkopf, along with other executives, board members, bankers, and lawyers. Broadcom CEO Hock Tan attended with other Broadcom executives and advisers.

Mr. Jacobs also said in his letter that the current $8 billion breakup fee is inadequate to protect Qualcomm against the risk that the deal doesn't gain regulatory approval.

"Our board is open to further discussions with Broadcom to see if a proposal that appropriately reflects the true value of Qualcomm shares, and ensures an appropriate level of deal certainty, can be obtained," he wrote.

Broadcom didn't immediately respond to a request for comment.

Broadcom last week raised its offer for Qualcomm to $82 a share from its earlier offer of $70 a share.

Shares in Qualcomm fell less than 1% to $64.85 on Friday, while Broadcom shares dropped 1% to $248.89.

Corrections & Amplifications Broadcom has agreed to pay $8 billion to Qualcomm if regulators reject its proposed takeover. An earlier version of this article incorrectly stated the breakup fee hadn't been disclosed. (Feb. 16, 2018)

Write to Cara Lombardo at [e-mail] and Ted Greenwald at [e-mail]

(END) Dow Jones Newswires

February 17, 2018 02:47 ET (07:47 GMT)

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