Qualcomm Chairman Paul E Jacobs in a letter to Broadcom CEO Hock Tan has explained why the company has rejected the revised $121 billion offer, indicating that the US-based chipset major is ready to discuss a bigger bid.
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Qualcomm’s concerns
# Qualcomm wants Broadcom to say yes to some commitments being sought by FTC, # European Commission and MOFCOM.
# Qualcomm is not clear about the intention of Broadcom regarding the future of Qualcomm’s licensing business.
# Broadcom wants to control decisions regarding licensing business during the extended period between signing and a potential closing, which would be problematic and not permitted under antitrust laws.
# Qualcomm wants a higher breakup fee towards compensation for risks.
# Qualcomm wants more value from Broadcom.
Qualcomm and Broadcom met on February 14, Valentine’s Day, to discuss about the revised $82 offer from Broadcom. And Qualcomm today responded to Broadcom in an open letter, saying the new offer does not represent the actual and potential value of Qualcomm and cover risk factors.
This indicates that Qualcomm management will not sign an agreement with Broadcom for the due diligence. March 6, the day of the annual general meeting, will be decisive for Broadcom CEO Hock Tan.
Broadcom earlier said it would seek the removal of 6 directors from the board of Qualcomm to get a majority in the 11 member board. Earlier, Broadcom offered two board positions to Qualcomm in the combined company after closing the deal.
