Chairman Paul Jacobs says bid ‘significantly undervalues’ mobile chip maker

Qualcomm’s board on Monday unanimously rejected Broadcom’s unsolicited $130 billion takeover bid.

"Broadcom’s proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects," said chairman Paul Jacobs, in a statement.

Tom Horton, Qualcomm’s presiding director, said the company reviewed Broadcom’s offer in consultation with financial and legal advisors, and concluded that as well as undervaluing Qualcomm, the proposal also comes with "significant regulatory uncertainty."

Earlier this month, Broadcom made a $70-per-share cash and stock offer for Qualcomm, a 28% premium on Qualcomm’s closing price the day before rumours of the bid began circulating. Including debt, the transaction is worth $130 billion.

The deal would bring together two of the biggest communications chip makers.

However, Qualcomm is confident it can succeed on a standalone basis.

"No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry," said Qualcomm CEO Steve Mollenkopf. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G."

Horton said Qualcomm’s board is "highly confident that the strategy Steve [Mollenkopf] and his team are executing on provides far superior value to Qualcomm shareholders than the proposed offer."

All eyes are now on Broadcom to see whether it will give up the chase or come up with a higher offer.