Qualcomm will attempt to fight-off a record-breaking takeover bid by rival semiconductor company Broadcom, Bloomberg reported.
The proposal is still in early stages, with Broadcom discussing possibilities with advisors, Bloomberg indicated in an earlier report.
Qualcomm is set to argue the $100 billion sum undervalues the company. Broadcom’s offer would be equivalent to $70 per share – a price last recorded in May 2015.
A tie-up between Broadcom and Qualcomm – worth $109 billion and $82 billion, respectively – could be the largest ever acquisition of a chipmaker. The current record holder is Qualcomm’s proposed $47 billion takeover of NXP Semiconductors, which is still working its way through regulatory reviews.
The news comes just after President Donald Trump made public Broadcom’s plans to move its headquarters back to the US from Singapore and as Qualcomm tries to work its way through a highly publicised patent dispute with smartphone giant Apple.
Broadcom already has a co-headquarters location in San Jose, California; Qualcomm’s headquarters is several hours down the West Coast in San Diego.
Bloomberg noted, based on 2016 revenue, the enlarged company would be the world’s third largest chipmaker behind Intel and Samsung. A purchase of Qualcomm would therefore face strong regulatory scrutiny.
On Thursday, Qualcomm took its latest swing at Apple with a new lawsuit alleging the smartphone vendor shared software secrets with rival chip company Intel.
But the legal battle has weighed heavily on Qualcomm. The company reported a nearly 90 per cent drop in its calendar Q3 profits thanks to the spat’s impact on licensing revenues, and Bloomberg noted Qualcomm’s market share prices have already tumbled 15 per cent this year.