Qualcomm on Thursday said its board of directors has unanimously rejected a revised $121 billion buyout offer from Broadcom, saying the proposal "materially undervalues" the chipmaker's assets.
Assisted by its team of financial and legal advisors, Qualcomm's board determined the takeover bid also fails to compensate for the downside risk of a failed transaction, the company said in a statement.
In a letter to Broadcom, Qualcomm said the $121 billion offer on the table fails to take into account Qualcomm's pending NXP acquisition, the "significant opportunity" presented by 5G-related technologies and the "expected resolution" of ongoing licensing disputes. While litigants were not mentioned by name, Qualcomm in the latter consideration is referring to an protracted legal battle with Apple over licensing fees.
Last year, Apple leveled a $1 billion suit against Qualcomm, alleging the chipmaker participates in anticompetitive practices and uses its "monopoly power" to charge excessive royalties. Apple subsequently halted payout of all licensing fees to the firm, a strategy adopted by partner suppliers last April.
Qualcomm fired back with a barrage of legal overtures initially claiming breach of contract. The firm later applied pressure with patent infringement filings in Germany, China and the U.S. before seeking a U.S. International Trade Commission ban on iPhone 8 and iPhone X in November.
Beyond its legal spat with Apple, Qualcomm is the target of multiple government probes and was recently hit with a $1.2 billion fine from EU regulators for making illegal payments to Apple in a bid to secure component orders.
Broadcom in an initial takeover bid offered to buy Qualcomm at $70 per share, but later raised the figure to $82 per share.
Though the revised bid was denied, Qualcomm in its letter said it is open to meeting with Broadcom to address what it characterizes as serious deficiencies in value and certainty.