Chipmaker company, Broadcom Ltd is reportedly considering on raising its bid to buy rival Qualcomm Inc. By offering more of its stock to Qualcomm’s shareholders, Broadcom is pressuring its rival to engage in negotiations.
Broadcom had previously attempted to acquire the chipmaker company for $103 billion on November 6, however, Qualcomm rejected the offer. The deal would have included $60 per Qualcomm share and $10 per Broadcom share.
According to several sources familiar with the situation, Broadcom’s CEO, Hock Tan, had told Qualcomm shareholders that his company will bump the offer on one condition. Qualcomm would have to stop pursuing semiconductor manufacturer, NXP. Tan Its shareholders reportedly want at least $80 per share in order for Qualcomm to go through with the deal. Qualcomm’s board of directors, however, has not yet decided on a potential offer, sources claim. Tan is reportedly considering raising the offer.
Qualcomm offered NXP $110 per share, a deal which expires on December 15. Only 2.4 percent of NXP shares have been offered. Sources say Qualcomm will also need to raise its bid to see any progress with NXP.
“Broadcom is happy with some parts of NXP, but that’s it,” one of the sources said. “They would prefer the NXP deal did not happen.”
However, Broadcom is interested in acquiring Qualcomm regardless if the rival company can close the $38 billion deal with NXP.
Broadcom has approached Qualcomm several times since it unveiled its offer earlier this month. The rival company has rejected those meetings, sources say. The sources chose not to be identified due to the confidential nature of the talks.
Qualcomm shares were up 2 percent at $68.05 after the news of a potentially bigger bid. Broadcom shares were down 0.3 percent at $275.82. Qualcomm is currently engaged in a patent infringement dispute with tech juggernaut, Apple Inc.
Both Broadcom and Qualcomm declined to comment.
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