Qualcomm rejects Broadcom's increased offer of $121 billion Dollars

Thomson Reuters Chipmaker Qualcomm said on Thursday its board had unanimously rejected Broadcom's revised $121 billion buyout offer

Already, the move from $70 to $82 has amplified the amount of costs Tan has to cut and will force Broadcom to make billions in divestitures to preserve its investment-grade credit rating, says Bloomberg Intelligence analyst Anand Srinivasan.

However, Qualcomm's notice ended on a positive note, saying the company is ready to continue negotiations, to see if Broadcom can "address serious deficiencies in value and certainty". The chipset manufacturer surprisingly, had the same reason for denying the massive bid.

This was the latest offer to be rejected by Qualcomm. The company has said that it will win all the cases against it in court and overturn more than $4 bullion that it has been fined with. Broadcom had offered $121 billion, its "best and final offer", although Qualcomm felt it was "inferior" to its prospects as an independent company. In conjunction with the rejection of the offer, Qualcomm Executive Chairman Paul Jacobs issued a public letter calling for a meeting to discuss the financial terms. The deal was approved by European Union antitrust regulators last month, and only China has yet to approve it. Qualcomm expects the government's blessing later this month.

Qualcomm's contention that the chipmaker's future is brighter as a standalone company has become a tougher sell, given the multiple challenges that have cropped up in the past two years.

Broadcom has been eyeing Qualcomm for quite a while.

But suppose the deal actually happens, it remains unclear whether it will even go through.

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According to the FT, the deal will also likely fend off a hostile takeover bid from semiconductor giant Broadcom. And, things should stay that way as they are now.

If you want to fight with Broadcom, you'd better be willing to put in some overtime. That is a lot of money but Qualcomm's board was firm with the decision.

If Qualcomm wants more on the table to consider the proposed merger, Tan might be under pressure to provide. As presented, your proposal raises more questions than it answers.

Qualcomm's board has unanimously rejected a supposedly final offer by smaller rival Broadcom to acquire the company, which if Broadcom chief Hock Tan's statement is to be believed spells the end of the takeover attempt - but a request for a meeting may test Tan's resolve.

Doing the math, $145 billion works out to $82 per share.

In a letter to Qualcomm board members this week, Tan called the offer "extremely compelling compared to any other alternative available to Qualcomm" and called on the board to open talks on the proposal.

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