Qualcomm announced Monday that it has rejected rival chipmaker Broadcom's acquisition offer of 70 U.S. dollars per share, saying the bid price was too undervalued to be accepted.
Qualcomm is a California-based multinational leading semiconductor and telecommunications equipment producer. Last year, its revenue reached 23.55 billion dollars.
"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, Qualcomm's executive chairman and chairman of the board, said in an official statement released Monday.
The statement also cited Qualcomm CEO Steve Mollenkopf as saying that no company has better position than Qualcomm in mobile, IoT (Internet of Things), automotive, edge computing and networking within the semiconductor industry, so the company has confidence to continue growth in these segments and lead the transition to 5G.
Broadcom, a California-based semiconductor device supplier, gave Qualcomm the offer last week. Based on the price consisting of 60 dollars in cash and 10 dollars per share in Broadcom shares, the purchase was estimated worth 130 billion dollars.
As a response, Broadcom issued a statement Monday, saying it remains fully committed to pursuing its acquisition of Qualcomm.
The company said its offer of 70 dollars per share represents a 28 percent premium over the closing price of Qualcomm's common stock on Nov. 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33 percent to Qualcomm's unaffected 30-day volume-weighted average price.
Local media said Qualcomm's rejection could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer.