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Having talked with some of Qualcomm's biggest shareholders, Broadcom is allegedly considering offering more of its own stock to make an acquisition offer more palatable — which, if successful, could radically change up Apple's legal and technological outlooks.
Sweetening the deal with extra shares would avoid Broadcom having to raise more debt and hurt its credit ratings, Reuters sources said on Wednesday. Broadcom has so far proposed buying Qualcomm for about $103 billion, a price that includes $60 per Qualcomm share and $10 per Broadcom share. That offer was rejected earlier this month, however.
The sources noted that Broadcom's board has yet to set a value for a new offer, and that representatives have yet to meet with people at Qualcomm. While Broadcom didn't approach Qualcomm prior to its first bid, it has reportedly made several rejected meeting requests since. Qualcomm's shareholders are said to be demanding at least $80 per share.
Should Qualcomm's leadership not bend, Broadcom CEO Hock Tan has expressed willingness to engage in a hostile takeover. The company is preparing to submit a slate of nominated directors for Qualcomm, and should they be voted in that could break down negotiation barriers.
Both businesses are long-time Apple suppliers — Broadcom specializing in Wi-Fi and Bluetooth, and Qualcomm handling cellular chips. Apple and Qualcomm are currently engaged in a worldwide legal battle over patents and royalties, but that could conceivably end if the latter is bought out.
Any deal would likely face heavy scrutiny from antitrust regulators, since even a $103 billion deal would be one of the biggest acquisitions in history and give Broadcom overwhelming influence in the mobile industry.