US chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.
Qualcomm has announced today that the Board of Directors has rejected Broadcom's proposal to acquire the company for around $105 billion.
The news agency's sources also suggested Broadcom could seek to pursue a hostile takeover by submitting directors for election to Qualcomm's board to force it to engage, should the latter's shareholders back its director candidates.
Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle. But Qualcomm is understood to view it as an opportunistic swoop, coming as the company is under threat from regulatory lawsuits and locked in a spat with Apple. Its own board similarly thinks that the offer undervalues the company and NXPs shares were trading above Qualcomms offer.
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"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.
It's not clear how Broadcom will respond.
ZDNet has reached out to Broadcom and will update if we hear more.
Qualcomm provides chips to carrier networks to deliver broadband and mobile data.
Broadcom shares are now up 0.3% on the day; Qualcomm is up 1.8%, at session highs. Qualcomm has more, including the soon to finish NXP acquisition, a great patent portfolio, high-end phone SoC leadership, Modem and WiFi leadership in 4G and 5G and even automotive, the world's first 10nm server and Windows 10 holding great Snapdragon potential.