Largest ever tech takeover 'significantly undervalues' chipmaker

Qualcomm denies $130bn rival takeover

The technology sector's largest takeover ever has been denied after chipmaker Qualcomm rejected a $130bn (£99bn) buyout offer from Broadcom.

Qualcomm said that, after a comprehensive review of the offer, its board unanimously concluded that the $70-a-share proposition "significantly undervalues" the chipmaker giant.

"It is the Board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects," said Paul Jacobs, executive chairman of Qualcomm.

"No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G," added Steve Mollenkopf, CEO of the firm.

Qualcomm also said the offer poses "significant regulatory uncertainty" for the firm, adding that strategy being executed by Mollenkopf is "far superior" in value to its stockholders than the proposed offer.

Reports emerged from Bloomberg on 6 November that chip giant Broadcom was on the verge of making a $130bn bid for Qualcomm, which would be the tech industry's largest technology takeover ever. At the time, Bloomberg sources claimed that Qualcomm's board would likely reject the deal.

Broadcom itself has yet to close its $5.5bn acquisition of Brocade which was announced in November last year, while Qualcomm is still wrangled in regulatory processes following its $38bn deal for Dutch semiconductor NXP.