The merger soap opera continues to unfold between Broadcom and Qualcomm. After Qualcomm upsized its bid for NXP this week, Broadcom has downsized its own bid for Qualcomm. Qualcomm has responded with another round of derision for that bid. Hanging in the balance is ownership of a good portion of the guts of current and future wireless technology.
Broadcom has reduced its hostile bid for Qualcomm from $82 to $79 per share. They suggest that Qualcomm's higher bid for NXP, which is aimed at convincing NXP's shareholders to vote for the deal, amounts to a 'decision to transfer $4.10 per Qualcomm share to NXP stockholders', thus lowering the value of Qualcomm itself and acting against the best interest of its shareholders. That last piece is the key, as Broadcom is trying to get its own slate of directors elected to Qualcomm's board and this applies pressure in support of that effort. Of course, that argument rests on the conclusion that the NXP deal isn't worth what Qualcomm thinks it is in the longer term.
For its part, Qualcomm quickly responded that “Broadcom’s reduced proposal has made an inadequate offer even worse despite the clear increase in value to Qualcomm stockholders from providing certainty around the NXP acquisition." They make the case that the NXP deal is more than worth the price, and that Broadcom's proposed deal would have a difficult path through regulators eeven if it didn't undervalue the company.
In the end, the decision comes down to a choice for Qualcomm shareholders and it's not about NXP. Take the money and run now? Or wait for the market to recognize the value the current management argues is buried under today's clouds.
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