The company said its offer of 70 dollars per share represents a 28 percent premium over the closing price of Qualcomm's common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33 percent to Qualcomm's unaffected 30-day volume-weighted average price.
In a press release, Qualcomm's executive chairman Paul Jacobs announced, "It is the board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the Company's leadership position in mobile technology and our future growth prospects".
"No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry". "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".
Tan, who has built Broadcom through a series of transactions that has helped reshape the $300 billion semiconductor industry, has previously been able to pull off deals with friendly approaches. Broadcom also said its proposal stands regardless of whether Qualcomm's pending acquisition of NXP closes under its current terms or is nixed.
Analysts said Broadcom can now raise its bid, go for a proxy fight or launch a hostile exchange offer. The combined business would instantly become the default provider of a set of components needed to build each of the more than a billion smartphones sold every year. Nevertheless, all signs are pointing up for Qualcomm, given the potential for a higher bid from Broadcom.
"We have received positive feedback from key customers about this combination", he said in a statement after Qualcomm's rejection. Even before the deal was rebuffed on Monday, Broadcom had been preparing for a proxy battle during which it would appeal directly to Qualcomm shareholders, according to a Bloomberg News report.