|
A tie-up would combine two of the largest makers of wireless
communications chips for mobile phones and raise the stakes for
Intel Corp, which has been diversifying into smartphone
technology from its stronghold in computers.
Broadcom's offer is at a premium of 27.6 percent to Qualcomm's
closing price of $54.84 on Thursday, a day before media reports
of a potential deal pushed up the company's shares.
Qualcomm shareholders would get $60 in cash and $10 per share in
Broadcom shares. Including debt, Broadcom's bid values the
transaction at $130 billion.
"In our view, $70 per share wouldn't be sufficient," Nomura
Instinet analyst Romit Shah wrote in a client note.
Qualcomm is trying to close its $38-billion acquisition of NXP
Semiconductors NV, one of the largest makers of chips for
vehicles and expanding into self-driving technology.
Broadcom said its proposal stands irrespective of Qualcomm's
acquisition of NXP goes through or not.
Shah believes Broadcom would encourage Qualcomm to complete its
NXP acquisition as it has extensive distribution channels, scale
and exposure to the fastest growing segments in automotive,
where Broadcom is underpenetrated.
Broadcom said BofA Merrill Lynch, Citi, Deutsche Bank, JP Morgan
and Morgan Stanley have advised that they are highly confident
that they will be able to arrange the necessary debt financing
for the proposed transaction.
Qualcomm shares, which traded over $70 as recent as December
2016, closed at $61.81 on Friday.
(Reporting by Supantha Mukherjee in Bengaluru; Editing by
Bernard Orr)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
