Qualcomm board rejects $103B offer

Company says deal includes ‘regulatory uncertainty’

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SAN DIEGO — Qualcomm rejected rival Broadcom’s unsolicited $103 billion bid as too low Monday, setting the stage for a hostile proxy fight for control of the company.

“It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects,” Paul Jacobs, executive chairman and board chairman of Qualcomm, said in a statement.

San Diego-based Qualcomm also said the bid “comes with significant regulatory uncertainty.”

Broadcom offered $60 a share in cash and $10 in stock for Qualcomm — a 28 percent premium over the company’s share price before news of the bid leaked Nov. 3, which, if accepted, would have made it the largest tech deal ever.

The combined companies would have had annual sales of $51 billion — trailing only Intel and Samsung in the semiconductor industry. The deal would have likely faced tough regulatory scrutiny, particularly in Europe and China.

Broadcom’s bid has been seen by analysts as an offensive move that takes advantage of Qualcomm’s lagging stock price, which was down 18 percent over the trailing 12 months before Broadcom’s takeover offer.

Qualcomm’s share price has been weighed down by its legal battle with Apple over patent royalties, fines from antitrust regulators and slow progress on its planned $38 billion acquisition of NXP Semiconductors.

Meanwhile, Broadcom’s share price has risen nearly 50 percent in the past 12 months as it completed the Broadcom/Avago Technologies acquisition, paid down debt and increased revenue and profitability.

Broadcom CEO Hock Tan said last week that Broadcom “made a very compelling offer to shareholders, and we believe it is a very fair and attractive proposal.”