The main reason behind the rejection appears to be that, following discussions with shareholders, Qualcomm CEO Steve Mollenkopf has concluded that the $70-per-share offer is too low. According to the company's official statement released today, Qualcomm's board of directors "unanimously rejects" the "unsolicited proposal" put on the table by Broadcom.
Paul Jacobs, Executive Chairman and Chairman of the Board of Qualcomm states the following in regards to the decision taken by the chipmaker.
Broadcom "remains fully committed" to the acquisition and said in its own statement that combining the two companies would create "a strong, global company with an impressive portfolio of industry-leading technologies and products".
This comes shortly after Qualcomm filed another lawsuit against its main chip purchaser, Apple, claiming that it broke a confidentiality clause found in its contract.
Broadcomm, however, says it will stick with the touted package that, including debt relief and other terms, would see the biz spend $130bn in total.
It was also said the offer does not price in the "uncertainty associated with getting the deal approved by regulators".
Qualcomm provides chips to carrier networks to deliver broadband and mobile data.
This could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer.
Broadcom Ltd., also announced, in the company of President Donald Trump, that it would bring its corporate address back from Singapore, to Delaware. Amid all the fighting with Apple, and accompanying loss of revenue, Qualcomm's shares had fallen 20% this year through late October to $51 before rumors of Broadcom's interest leaked.
After this response from Qualcomm, we are yet to hear Broadcom's reaction. The deal has been delayed by the Committee on Foreign Investment in the United States, which investigates proposed acquisitions of USA companies by foreign buyers on national security and intellectual property grounds. "We are well-advised and know what our options are, and we have not eliminated any of those options", Broadcom Chief Executive Hock Tan told Reuters last week.