Chipmaker Broadcom (AVGO) on Monday raised its offer to buy Qualcomm by 24% to more than $121 billion, sweetening the bid and putting more pressure on its rival to come to the table for negotiations.
“Qualcomm and its board now have a tough decision as this is a compelling offer in our opinion,” said analyst Daniel Ives of GBH Insights.
The new offer values the company at $82 per share — a premium of 24% from Qualcomm’s close on Friday. It also puts pressure on Qualcomm (QCOM) to either buy NXP Semiconductors (NXPI) at $110 per share or terminate the $38 billion deal.
NXP shareholders had held up a deal, saying it undervalued the company and had sought a price as high as $135.
Qualcomm shares were down 3% at $64 in premarket trading. They were up 25.5% in the last 12 months as of Friday’s close.
Broadcom shares were fell 2% to $239. NXP shares were slightly down at $120.10.
Qualcomm in November rejected Broadcom’s $70 per share cash-and-stock bid that valued the company at $103 billion.
In the new offer, Qualcomm shareholders would get $60 in cash and the $22 in Broadcom shares. Broadcom’s previous $70 per share offer consisted of $60 per share in cash and $10 per share in stock.
“We believe Broadcom is serious and aggressive around acquiring Qualcomm and this higher bid reflects that,” Ives said.
Qualcomm, which had said Broadcom’s offer significantly undervalued the company, could not immediately be reached for comment.
Reuters reported exclusively on Sunday that Broadcom had planned to raise its offer.
After Qualcomm rejected its earlier offer, Broadcom and private equity firm Silver Lake Partners took the offer hostile by nominating 11 directors to its board in December. Qualcomm later rejected the nominees.
Shareholders will vote for or against the nominees at an annual meeting on March 6.
Singapore-based Broadcom is known for its connectivity chips used in products ranging from mobile phones to servers and Qualcomm provides chips to mobile carrier networks to deliver broadband and data.
Broadcom said on Monday it remained confident that the deal would be completed within 12 months following a definitive agreement.
Qualcomm had said that the regulatory review processes required around the world would take much longer.
Any deal between the two companies would attract significant scrutiny across several countries where they operate.
The U.S. Federal Trade Commission last month made a second request for information on Broadcom’s bid.
