Qualcomm's board has unanimously voted to reject Broadcom's unsolicited $105 billion takeover offer on the grounds that the bid price is too low.
In a statement, Qualcomm executive chairman Paul Jacobs said the board believes that the proposed offer significantly undervalues Qualcomm considering its leading market position in the mobile space and its future growth prospects.
“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry,” Qualcomm CEO Steve Mollenkopf added.
“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.”
But Broadcomm has vowed to continue pursuing its proposed acquisition. The company plans to reach out to the company's board and management, and that it has received positive feedback from key customers and shareholders.
Broadcom has not ruled out an attempted hostile takeover, a proxy battle or raising its bid price to make it more attractive to the board, Reutersreported.
Broadcom submitted an unsolicited offer for Qualcomm last week. The deal would involve purchasing a 100% stake in Qualcomm for $105 billion as well as assuming $25 billion in net debt.
As well as the board's reluctance, Broadcom could face regulatory hurdles over a merger that would create a dominant player in the smartphone component market.