— Is Qualcomm Inc. worth $70 per share?

That simple question may be the beginning of a long negotiation process. Or it could be the key that determines whether Qualcomm (Nasdaq: QCOM) survives in its current form as a San Diego-based corporation.

Broadcom Ltd. announced its unsolicited, $105 billion bid for Qualcomm earlier this month. The proposal has been billed as the largest technology takeover ever. Qualcomm said its board plans to evaluate the offer and do what’s best for its shareholders. The bid comes as Qualcomm works to close its acquisition of NXP Semiconductors. Together the three companies would have $51 billion in revenue, making the combined company the world’s third largest chipmaker behind Intel and Samsung.

Broadcom (Nasdaq: AVGO) proposes to exchange each Qualcomm share for $60 in cash and $10 in Broadcom stock. It’s a 28 percent premium over Qualcomm’s share price on Nov. 2, before leaks of the deal began circulating. Qualcomm shares, which closed Nov. 2 at $54.84, closed at $64.10 Nov. 7 and were trading in the $65 range on Nov. 8.

A Deal Would Likely Take a Year

Broadcom said the deal would take 12 months to conclude once the two parties strike a definitive agreement.

If they do.

Jim Kelleher, an analyst with Argus Research, expects Qualcomm to rebuff the $70 offer. Nikhil Varaiya, a finance professor with the Fowler College of Business at San Diego State University, agrees. He said he wouldn’t be surprised to see Qualcomm hold out for close to $100 per share.

Patrick Moorhead, a technology analyst, said the $70 price is below what Qualcomm was getting before it ran into its recent antitrust challenges. And he pointed to Qualcomm’s work preparing a faster, more immediate form of wireless data communications, called 5G.

“[T]he current offer looks like a lowball. 5G is transformational. Broadcom knows it but doesn’t have it. This is the premise for the acquisition,” said Moorhead, president of Moor Insights & Strategy.

Qualcomm develops wireless technology, making the bulk of its profit by licensing its patents to other companies. It also makes microchips for wireless devices.

Broadcom appears more interested in Qualcomm’s cellular business and less interested in ancillary businesses such as connectivity chips and its radio frequency chip joint venture with TDK, according to Wells Fargo Securities analyst David Wong.

Earlier Broadcom Efforts

Broadcom told investors in its Nov. 6 presentation that it has made earlier, good faith efforts to discuss a business combination with Qualcomm, but those overtures didn’t go anywhere.

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