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Broadcom mulls sweetened Qualcomm bid

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NEW YORK: Chipmaker Broadcom Ltd is considering raising its offer to buy rival Qualcomm Inc by offering more of its own stock, following consultation with several of Qualcomm’s top shareholders, according to people familiar with the matter.  While the timing of the new offer is uncertain, Broadcom’s bid preparations indicate that it is planning to apply pressure on Qualcomm to engage in negotiations by offering more to its shareholders, in addition to threatening to replace its board of directors.


Broadcom’s Chief Executive Hock Tan has stated he is open to launching a takeover battle and sources have previously said the company is preparing to submit a slate of directors by Qualcomm’s Dec. 8 nomination deadline. Qualcomm shareholders that want the company to engage in deal talks with Broadcom will be able to vote for that slate at a March 6 shareholder meeting.


Broadcom has offered to pay $103 billion for Qualcomm, made up of $60 per share in cash and $10 per share of its own stock. Raising the offer by adding more of its shares would avoid Broadcom having to raise more debt and further pressure its credit rating, the sources said.


Qualcomm’s shareholders have indicated to Broadcom they expect at least $80 per share in order for Qualcomm to be sold, the sources said. Broadcom’s board has not yet decided on the level of any new offer, the sources added. — Reuters


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