US: Qualcomm bracing for $100b fight with Broadcom

Qualcomm is preparing to fend off an unsolicited US$100 billion takeover bid from Broadcom Ltd, arguing it undervalues the company, people familiar with the plans said, according to the Financial Times.

Broadcom is preparing a US$70-a-share offer for Qualcomm, which could come as soon as Monday, November 6, said the people, who asked not to be identified because the plans are private.

Qualcomm will make the case to shareholders that, in addition to a possible battle with the board, Broadcom may also face challenges from regulators, the people said. Additionally, one of the Financial Times’ sources considers that as soon as the IP/antitrust battle with Apple is solved, Qualcomm’s stock will trade significantly higher than the US$70 offering.

While Qualcomm’s board and management will give the offer due consideration, the San Diego-based company will likely recommend that shareholders reject it, the people said. This would force Broadcom to pursue a proxy fight if it wishes to proceed.

A Qualcomm spokesman declined to comment, and Broadcom didn’t immediately respond to a request for comment.

Qualcomm will make the case to shareholders that, in addition to a possible battle with the board, Broadcom may also face challenges from regulators, the people said.

Broadcom has been trying since last year to secure approval for its purchase of Brocade Communications Systems Inc, a substantially smaller deal.