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Broadcom upping Qualcomm hostile takeover bid to $121 billion

By Mike Wuerthele

The hostile takeover of Qualcomm continues, with Broadcom offering not just $60 per share of Qualcomm, but more than double the amount of stock for the combined entity that current shareholders will reap, should the deal conclude.

Broadcom has boosted its bid for Qualcomm to around $121 billion amping up its previous offer a bit, according to a report on Monday morning from Bloomberg. While shareholders will still be given $60 per share of Qualcomm stock, it will now also grant $22 in Broadcom shares, more than double what it offered before.

The deal is reportedly contingent on Qualcomm's purchase of NXP Semiconductors either finishing up at the existing offer, or being ended with no negotiation. concluding one way or another. Qualcomm has an offer on the table of $110 per share of NXP stock -- with shareholders complaining that it must be increased for the deal to conclude.

Broadcom's initial offer stipulated that shareholders would be given $60 payment for each share owned, and $10 in Broadcom shares -- a deal which was rejected. The buy offer represented a premium of 27.6 percent to Qualcomm's closing price of $54.84 before rumors started circulating in early November 2017 about a possible deal. Qualcomm's current stock price is around $64, in before-hours trading.

Broadcom is known for its Wi-Fi modules and has been a regular Apple supplier, including the iPhone X. Buying Qualcomm would immediately thrust it into a leading position in cellular modems, as well as mobile processors.

Qualcomm is in the midst of a multi-front legal battle about broadband chip licensing with Apple. Broadcom Chief Executive Hock Tan claims that Broadcom absorbing Qualcomm would lead to a "very constructive" environment for Apple and would allow for "resetting relationships."

Broadcom has around $5.25 billion of cash and cash equivalent on hand, and has garnered sufficient financing to seal the deal with Bank of America Merrill Lynch, Citi, Deutsche Bank, JP Morgan, Morgan Stanley, and Silver Lake Partners. Qualcomm reported $35.03 billion of the same on Sept. 24.

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