Qualcomm and Broadcom to discuss acquisition offer on February 14

Delia Walker
February 15, 2018

USA chipmaker Broadcom has agreed record-breaking syndicated loans of up to US$100bn with 12 banks to finance its proposed US$121bn acquisition of Qualcomm, the company said on Monday.

As previously reported, the value of the transaction equates to $60 per share in cash, with an additional stock component taking the total value to $82 per share - a big increase on the original offer of $70.

As Bloomberg reports, Qualcomm apparently offered to meet with Broadcom to discuss the takeover bid, particularly to address issues to continue the conversation.

Broadcom had requested last week to meet over the weekend, but has now agreed to meet on Wednesday instead, the sources said on Sunday, asking not to be identified because the meeting's details are not public.

The concerns include the risk of not receiving regulatory approval, disruption to Qualcomm's business operations and, strikingly, a reference to two billion-dollar customers who stated that they would take their designs elsewhere if the deal was approved.

Broadcom made its first offer on November 6 following a visit by its CEO to the White House, where he met President Donald Trump and announced plans to move the tech company back to the United States from Singapore.

Last week, Broadcom upped its offer for Qualcomm to $121bn after its earlier bids were rejected by the chipmaker.

According to the report, Broadcom has agreed to hand over $8m to Qualcomm if antitrust regulators were to find problems with the deal and block it.

"We urge you to meet with us without further delay, and stand ready to meet this Saturday or Sunday in NY or another mutually convenient location", Tan said in a letter to Qualcomm chairman Paul Jacobs.

The rich offer puts pressure on Qualcomm's board ahead of a March 6 annual meeting, where it must show it is acting in the best interests of shareholders. But in an open letter, Jacobs explains that while the board members unanimously shot down the offer, they were still willing to listen. Qualcomm was quick to reject the proposal with the company's Board of Directors saying it dramatically undervalues the company.

Separately on Friday, Qualcomm said it extended the cash tender offer to buy NXP Semiconductors NV by two weeks to February 23.

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