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Qualcomm Set To Reject $130bn Bid From Broadcom (ft.com)
Tim Bradshaw, reporting for Financial Times: Chipmaker Broadcom officially unveiled a $130bn offer, including net debt, for Qualcomm on Monday, in what could be the largest tech deal in history. Under Broadcom's proposal, Qualcomm shareholders would receive $70 per share -- $60 in cash and $10 in shares of its rival. It would value Qualcomm's equity at roughly $103bn. Qualcomm is set to reject Broadcom's takeover offer (Editor's note: the link could be paywalled; an alternative source wasn't immediately available), as the US chipmaker views its rival's $130bn proposal as too low and fraught with regulatory risks, people familiar with the matter said. The offer represents a 28 per cent premium over Qualcomm's share price on November 2, after it first emerged that Broadcom was preparing an offer. Broadcom also said that its offer stands whether or not Qualcomm completes its $38bn acquisition of NXP, which has yet to close.
This looks to be the non-paywalled Financial Times story:
http://www.businessdayonline.c...
I deny that I have not avoided attaining the opposite of that which I do not want.
Literally:
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Translation of rejection: "We want a much bigger payday". Everyone has a price, and business is business. Let the dance begin.
If the offer is truly the same regardless of whether or not the NXP deal closes, there is a huge incentive for that deal to fall through. If they're paying $130b regardless, it would make no sense for Qualcomm to go through with that deal -- it implies that Broadcom is effectively valuing NXP at $0 and giving Qualcomm's shareholders no value for that asset.
With Qualcomm execs thinking they can extract percentages of device prices from manufacturers rather than just charging a fair price for a part, and their other aggressive and anti-competitive lawsuits they have going, shareholders should welcome new management before the company goes the way of SCO and Oracle/Java. We've heard Apple is already preparing to jump to Intel for radio silicon and others will rapidly follow, importantly and especially on the high end.
And that's without being a fan of Broadcomm at all - they've been really bad with security, documentation, NDA's and support to the point of shooting themselves in the foot with selling their MIPS platform, etc. into the embedded linux space. I'm willing to bet that their move to Singapore will be good for the ecosystem though.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
it implies that Broadcom is effectively valuing NXP at $0 and giving Qualcomm's shareholders no value for that asset.
If the deal with Broadcom went through then yes, NXP is worthless, and Hock would firesale it the very same day.
Qualcomm is trading low because of its dispute with Apple. It should get more - especially in this market.
However, if we value it according to Silly Valley VC startup methods, I come to a value of ONE HUNDRED TRILLION DOLLARS!!
-Yours;
Head Investment Strategist,
Dr. Evil Enterprises.
If the offer is truly the same regardless of whether or not the NXP deal closes, there is a huge incentive for that deal to fall through. If they're paying $130b regardless, it would make no sense for Qualcomm to go through with that deal -- it implies that Broadcom is effectively valuing NXP at $0 and giving Qualcomm's shareholders no value for that asset.
Math isn't your strong point, hey?
Qualcomm either spend their money buying NXP and own that asset, or they don't buy NXP and keep their cash.
How does that make a lick of difference?
THere is also a bunch of due diligence that is going to happen before it closes where Broadcom is going to get access to a lot of proprietary trade secret info.
That's not how due diligence on deals like this works unless one of the parties is thoroughly retarded. This is an unsolicited bid. They don't get to come in and examine everything just because they made an offer to buy. There would be verbiage in the buy/sell offer to allow verification of important details but trade secrets remain guarded until the deal closes. There also would be some non-disclosures with teeth and lots of lawyers involved on both sides.
If the deal fails because of regulators or any other reason then Broadcom walks away with a lot of Qualcomm secrets.
No they do not. And if they did there would be lots of flesh eating lawyers involved soon afterwards.
is that Broadcom will value NXP for whatever Qualcom values it. $$$ dollars are removed from Qualcom, but an alleged asset of $$$ dollars becomes part of Qualcom,
Yeah, well, that's just, like, your opinion, man.
Nothing wrong with your opinion, but you're projecting it on the shareholders to make it their wanted opinion. It doesn't work that way. In the real world, one buys Qualcomm exactly for its aggressive abilities to squeeze the lemon, hardened by patents. All customers would jump ship if there would be cheaper alternatives of equal capabilities. So the stock holders want them to stay one step ahead, and keep squeezing as hard as they can in the meantime. That in fact dictates what they are doing.
NXP make FPGA's that are used in many itar projects. It's more of an issue with people.
Qualcomm appears to have made several mistakes with Apple.
When the iPhone 4 first added CDMA capability and was released to Verizon/Sprint/U.S. Cellular, Qualcomm should have negotiated the per-device percentage for their modems, the FRAND for the GSM modems from Infineon that Apple was currently using, and any IP licensing on top of this. There should have been clauses in the agreement for new patents on each side that discouraged them from going to court.
Qualcomm should never have licensed their source code as it appears they did in 2010. Apple is too big to trust with this.
I am guessing that Qualcomm's goal is to extend the per-device percentage onto modems that they did not manufacture (Intel/Infineon). It appears that this practice has ignited the most ire from Apple.
I wonder if the Intel and MediaTek substitute modems can access Verizon's (legacy) CDMA network. I'd also be curious to see how Samsung handles their Qualcomm licensing, since they (like Apple) use a mix of modems.
Qualcomm is history without Apple and those emotional executives at Apple have probably already made their final decision. But, aside from giving up gigabit-capable LTE bands, it's worth noting that my iPhone 7+ that's been dropped a couple of times (but no scratches thanks to Tech21 case) stays connected via LTE in places where my iPhone X has had to fall back to pre-LTE modulation. One of the two devices probably has an Intel chip in it rather than the superior, but throttled, Qualcomm chip, but I don't know which one and suppose it could also be related to the antenna or different type of housing. I don't think having an inferior LTE chipset will hurt Apple --they learned from their mistake with PC OEMs and used their iPod war chest to buy up all the capacity they could find (basically everything outside of South Korea and then some), making it too expensive to produce a knock-off using an inferior OR a superior chipset.
> ... shareholders should welcome new management before the company goes the way of SCO and Oracle/Java ...
Qualcomm will soon get to enjoy the same fate as that of Yahoo
When others offered to puchase Yahoo for top dollar, Yahoo's management declined - only to accept a much, much lower offer years later
I already sold off the last of my Qualcomm stock yesterday, taking advantage on the pent-up demand these few days