Reports surfaced on Wednesday that Broadcom is considering increasing its offer for Qualcomm. As it stands, Broadcom’s offer is valued at $103bn, excluding debt, and consists of $60 in cash and $10 worth of Broadcom shares for each Qualcomm share owned. According to reports from Qualcomm’s shareholders, the group requires at least $80 per share from Broadcom to sell their shares. In return, Broadcom has now indicated it may sweeten its offer by including more of its own stock. Qualcomm’s shares increased by 2.19% by the close, helped along by the possibility of a sweetened offer, while Broadcom shed 0.44% to settle at $275.37 per share.
Qualcomm added only 1.15% on Monday to settle at $62.52, despite reports that Broadcom had made a $130bn bid for the group. This is the largest acquisition ever attempted by a technology company in human history. As it stands, Qualcomm shareholders have been offered $60 in cash and $10 in Broadcom shares, which represents a premium of 27.6% to Qualcomm’s closing price of $54.84 on Thursday. This values the transaction, including debt, at around $130bn. According to reports, Qualcomm has confirmed it will review the offer, but is inclined to reject it at this stage. It seems the offer is too low. There are also concerns around the substantial risk posed by regulators taking too long to approve the deal or even rejecting it outright.