Qualcomm said on Thursday that its board had unanimously rejected a revised $121 billion buyout offer from Broadcom, a rival chip maker.
The board had determined that Broadcom’s proposal “materially undervalues” Qualcomm and fell short of the firm regulatory commitment the deal would demand, given the significant downside risk of a failed transaction, the company said.
Qualcomm, based in San Diego, also said it had offered to meet with Broadcom, which has headquarters in Singapore and Irvine, Calif., to see if it could address the serious deficiencies in value and certainty in its proposal.
Broadcom increased its offer on Monday to $82 a share from $70 a share, saying it was its “best and final” offer. By doing so, Broadcom raised the stakes a month before Qualcomm’s annual shareholder meeting, at which Broadcom hopes to unseat the entire board.
Highlighting its commitment to the deal, Broadcom had also pledged to pay a “significant” breakup fee if regulators vetoed a deal, as well as pay additional cash if the two companies had not closed a transaction a year after its announcement. It also promised other steps to close the deal, including selling overlapping businesses.
A successful acquisition of Qualcomm would be the technology industry’s biggest-ever takeover, creating a tech giant whose products would be used in nearly all of the world’s smartphones.