Broadcom Lowers Offer for Qualcomm, Citing 'Value Transfer' --2nd Update
February 21 2018 - 12:01PM
Dow Jones News
By Austen Hufford
Broadcom Ltd. lowered its offer to buy Qualcomm Inc. by about $4
billion in response to Qualcomm raising its offer to buy NXP
Semiconductors NV.
Qualcomm on Tuesday raised its offer to buy NXP Semiconductors
by more than $5 billion to $44 billion, and locked up support from
key stakeholders.
Wednesday, Broadcom, which had opposed the increased offer for
NXP, said in a securities filing Wednesday that it would lower its
own bid for Qualcomm, citing the "value transfer" to NXP
shareholders. Broadcom said its per-share offer of $79 consists of
$57 a share in cash and $22 a share in stock. The proposal would be
worth about $117 billion, compared with the $121 billion offer that
had been on the table.
However Broadcom said it would revert to its previous $121
billion bid if the NXP deal doesn't go through.
Qualcomm and Broadcom have been maneuvering for months around
what could be the largest tech deal ever. Broadcom sells a diverse
line of equipment for networking and communications, including
chips for Wi-Fi and Bluetooth technology that connect devices that
are closer together. Qualcomm has looked to NXP to broaden its
product line beyond its stronghold making chips for smartphones to
automobiles, security and internet-connected devices.
Broadcom Chief Executive Hock Tan had previously stressed the
company's offer for Qualcomm was dependent on the target not
raising its price for NXP but recently softened his position, and
the latest move Wednesday showed that he still wants the deal to
succeed.
Broadcom and Qualcomm are headed toward a March 6 showdown in
which Qualcomm shareholders are scheduled to vote on a slate of
directors nominated by Broadcom.
In another recent concession, Mr. Tan reduced his number of
candidates from 11 to six, seeking a majority rather than trying to
unseat the entire Qualcomm board.
Shares in Broadcom rose 1% in morning trading, while Qualcomm's
fell 1.8%
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
February 21, 2018 11:46 ET (16:46 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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