The largest ever technology deal just got a whole lot bigger as semiconductor company, Broadcom, is reportedly raising its bid for Qualcomm Inc. to an estimated $120 billion, according to a person familiar with the matter.
According to the source, Broadcom is considering to raise its offer to about $80 to $82 per Qualcomm share. Qualcomm CEO, Steve Mollenkopf, had previously rejected the chipmaker’s original bid of $70 per share saying that the offer “significantly undervalues” the company. The person claims that Broadcom will announce the new offer Monday morning US time.
With a potential new deal on the table, Broadcom CEO, Hock Tan is improving prospects for his Qualcomm board nominations in a shareholder vote scheduled for March.
The source said that the new bid hasn’t been finalized. Both Qualcomm and Broadcom representatives have declined to comment on the matter.
Tan has been applying pressure on Qualcomm in an effort to render the semiconductor rival as Broadcom’s leading smartphone modem chip division.
Qualcomm, on the other hand, has repeatedly expressed their desire to continue as a standalone company. According to the chipmaker, it’s on the brink of breaking into new markets for products such as personal computers, autos, and servers, something which will make Qualcomm a bigger company.
Broadcom has said that it could finalize a deal with the San Diego-based company within a year, however, Qualcomm rectified their forecasts claiming that a potential deal would last for 18 months.
The chipmaker, while adamant on keeping their identity intact, has been hurt by attacks on its licensing business numerous times. Regulators worldwide are fining or investigating Qualcomm due to conflicts with tech giant, Apple Inc,
Most of Qualcomm’s revenue comes from charging fees on patents that cover the fundamentals of all modern phone systems. This capital allows the company to continue their industry leading research and design. Qualcomm expects to beat Apple in court, however, if the opposite is to occur, then the semiconductor giant will have its future taken away.
Qualcomm’s stock had been trading at less than $55 prior to Broadcom’s new deal.
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