Broadcom has let it be known that it is prepared for a takeover battle.
According to 4 sources familiar with the matter at hand, Qualcomm Inc is preparing to reject Broadcom’s $103 billion takeover bid as early as this week.
Its likely Qualcomm’s board met on Sunday to review the unsolicited offer and decide on its response strategy, said sources.
Steven Mollenkopf, Qualcomm’s CEO spent the last few days soliciting feedback from his shareholders and got the feeling that Broadcom’s $70 per-share bid undervalues the company and does not price in the uncertainty associated with getting the deal approved by regulators, said sources.
According to Broadcom’s CEO Hock Tan, who had said earlier this month that he would re-domicile his company to the U.S. from Singapore, he is open to a takeover battle.
As per sources, Broadcom is preparing to submit a slate of directors to Qualcomm’s December 8 nomination deadline. The move will allow Qualcomm’s shareholders to decide whether it wants to replace the directors in the company’s board and force it to engage with Broadcom.
Sources further add, Broadcom has also been preparing for the possibility of raising its bid for Qualcomm through more debt financing. However, it is yet to be determined when Broadcom would choose to play this card.
At the end of Friday’s closing, Qualcomm’s shares rested at $64.57 while Broadcom’s ended at $264.96.