San Francisco (Monitoring Desk): 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 and it is the world largest tech deal.
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.
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.
“Now it’s a game of high-stakes poker for both sides,” said GBH Insight analyst Daniel Ives, who believes bullish investors were hoping for $75 to $80 per share. The offer represents a premium of 27.6 percent to Qualcomm’s closing price of $54.84 on Thursday.
Shares of Qualcomm, whose chips allow phones to connect to wireless data networks, traded above $70 as recently as December 2016 and topped $80 in 2014. They rose 1.1 percent to $62.52, suggesting skepticism a deal would happen.