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United States

Broadcom said to up bid for Qualcomm to around US$120 billion

PUBLISHED : Monday, 05 February, 2018, 5:26am
UPDATED : Monday, 05 February, 2018, 5:26am

Broadcom Ltd plans to unveil a new offer of around US$120 billion for Qualcomm Inc on Monday, aiming to ratchet up pressure on its US semiconductor peer to engage in negotiations, people familiar with the matter said on Sunday.

The move comes ahead of a Qualcomm shareholder meeting scheduled for March 6, when Broadcom is seeking to replace Qualcomm’s board of directors by nominating its own slate for election.

Broadcom is expected to meet with its advisers later on Sunday to finalise an offer that values Qualcomm between US$80 and US$82 per share, two of the sources said. Broadcom’s previous US$70 per share offer consisted of US$60 per share in cash and US$10 per share in stock.

Broadcom also plans to offer Qualcomm a higher-than-usual break-up fee in the event regulators thwart the deal, according to the sources. Typically, such break-up fees equate to around 3 per cent to 4 per cent of a deal’s size.

The sources cautioned that Broadcom Chief Executive Officer Hock Tan may decide to significantly change the terms at the last minute.

The sources asked not to be identified because the deliberations are confidential. Broadcom and Qualcomm did not immediately respond to a request for comment.