US/Japan: Broadcom rumored to consider sweetened Qualcomm bid

Chipmaker Broadcom is considering raising its offer to buy rival Qualcomm by offering more of its own stock, following consultation with several of Qualcomm’s top shareholders, according to people familiar with the matter.

While the timing of the new offer is uncertain, Broadcom’s bid preparations indicate that it is planning to apply pressure on Qualcomm to engage in negotiations by offering more to its shareholders, in addition to threatening to replace its board of directors.

Broadcom’s chief executive Hock Tan has stated he is open to launching a takeover battle and people in the know had previously said the company is preparing to submit a slate of directors by Qualcomm’s December 8 nomination deadline. Qualcomm shareholders that want the company to engage in deal talks with Broadcom will be able to vote for that slate at a March 6 shareholder meeting.

Broadcom has offered to pay US$103 billion for Qualcomm, made up of US$60 per share in cash and US$10 per share of its own stock. Raising the offer by adding more of its shares would avoid Broadcom having to raise more debt and further pressure its credit rating, the people said.

Full Content: Telecom Paper

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