Qualcomm is insisting on an extra $10 a share from chipmaker giant Broadcom, before it even looks at the takeover bid.
Qualcomm rejected Broadcom’s $70 a share offer as grossly underestimating the company value, however the mega-merger will go ahead, if Broadcom coughs up more cash. Word on the street is that if Broadcom offered $80 then Qualcomm might take it more seriously.
Daniel O’Keefe, a fund manager of the $3.1 billion Artisan Global Value Fund, which owns Qualcomm stock, told Bloomberg: “We would be very interested in evaluating an offer that begins with an 8. The board should urge Broadcom to come back with a higher bid.”
Broadcom’s offer came with valuation of $70 per share for Qualcomm. That’s down from its five year high of $81.6 in mid-2014.
However, in more recent years Qualcomm has gone through some turbulence, which has decreased the value of its shares to below $70.
Looming large over the firm is an ongoing legal battle with Apple and regulatory actions around the world, threatening its licensing business, which accounted for $5.1 billion of Qualcomm’s pre-tax profits in its fiscal 2017.
