United States chipmaker Qualcomm rejected the suit, deeming the offer as a "significant undervaluation" for shareholders which did not take into account the San Diego, Calif. -based company's position in the semiconductor space.
In Broadcom's updated offer, the cash portion remains at $60 a share. According to Broadcom, the $82 price represents a premium of 50% to Qualcomm's share price on November 2, 2017, the day when speculation about the potential acquisition was first published. Broadcom is also inviting two board directors of Qualcomm, including board chairman Paul Jacobs, to join the board of the combined company.
Broadcom has increased its bid for Qualcomm by 17%, and is now offering shareholders $82 per share. This has been added in order to diffuse one of Qualcomm's key objections, namely that such a deal is unlikely to ever be given the go-ahead by regulators.
In a presentation on its website, Broadcom criticized the performance of Qualcomm's management, saying Qualcomm's "business model has been broken for a long time" and that the company's stock has significantly underperformed peers.
But investors may also be concerned that Broadcom said it would walk away from the deal if Qualcomm doesn't agree to merge soon or if shareholders don't elect Broadcom's slate of nominees to Qualcomm's board.
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"We believe any responsible board would engage with us, without further delay, to turn this proposal into an executed definitive agreement", the letter stated.
However, the big increase - albeit in Broadcom stock rather than greenbacks - may persuade Mollenkopf and Qualcomm's shareholders to take the money (and Broadom stock) and run.
Qualcomm, which provides chips to carrier networks to deliver broadband and mobile data, has been trying to close its US$38bn acquisition of automotive chip-maker NXP Semiconductors after signing a deal in October 2016. "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".
Qualcomm, which makes the omnipresent Snapdragon chips used in smartphones and tablets, said Monday that it has received the revised bid and that its board, along with financial and legal advisers, will review the offer.