Singapore-based Broadcom Ltd on Wednesday said it was cutting its offer price for mobile chipmaker Qualcomm Inc in the wake of the US firm’s increased bid for Dutch rival NXP Semiconductors NV.
Broadcom reduced its offer to US$79 a share, which would still be the largest-ever deal in the technology sector if completed at an estimated value of nearly US$117 billion.
The move came amid a closely watched hostile bid for Qualcomm that could reshape the fast-evolving sector of chips for smartphones and connected devices.
The offer was reduced because “Qualcomm’s board acted against the best interests of its stockholders by unilaterally transferring excessive value to NXP’s activist stockholders,” Broadcom said.
Qualcomm, the dominant maker of smartphone chips, has moved to fend off Broadcom’s hostile takeover efforts and last week rejected the latest offer of US$82 a share.
“Broadcom’s reduced proposal has made an inadequate offer even worse despite the clear increase in value to Qualcomm stockholders from providing certainty around the NXP acquisition,” a Qualcomm statement said.
Qualcomm argued that the offer of US$79 per share undervalues the company and fails to take into account strategic and financial benefits that it would gain from acquiring NXP.
Qualcomm on Tuesday raised its offer for NXP to an estimated US$43 billion, aiming to alleviate concerns of some NXP investors and seal the tie-up, which would make a Broadcom acquisition of Qualcomm less enticing.
Broadcom on Wednesday said it remained committed to acquiring Qualcomm and its cash-and-stock offer would revert back to US$82 per share should Qualcomm fail to acquire NXP.
Qualcomm is due to hold an annual meeting on March 6 at which Broadcom has nominated six people to replace the majority of Qualcomm’s board of directors.
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