Representatives of Qualcomm Inc. and Broadcom Ltd. met for a second time on Feb. 23, to talk about Broadcom’s proposal to buy the San Diego corporation.
During the Friday meeting, Qualcomm (Nasdaq: QCOM) proposed changes to the merger agreement that Broadcom (Nasdaq: AVGO) originally drew up, and said Broadcom still needed to improve on its price. Qualcomm urged Broadcom to enter a nondisclosure agreement so it could share nonpublic information about the company.
It has asked to meet with Broadcom again.
Broadcom called the two businesses’ Feb. 23 meeting “engagement theater” and said its counterpart was trying to postpone its annual meeting, set for March 6.
Broadcom has nominated its own slate of six directors to the Qualcomm board. If all six were to win, they would form a majority of the Qualcomm board and would be able to approve a purchase at the price Broadcom has proposed.
This all happened against the backdrop of Qualcomm’s decision, announced Feb. 20, to increase its offer for NXP Semiconductors N.V. to $127.50 per share.
In an attempt to diversify the company’s revenue stream, Qualcomm has been pursuing NXP (Nasdaq: NXPI) since the fall of 2016. NXP is particularly strong in semiconductors for connected cars. Qualcomm received key antitrust approval from the European Commission to buy NXP in mid-January. China has yet to OK the deal.
Qualcomm originally offered to buy NXP for $110 per share, but said the value of NXP has increased. NXP shareholders have increasingly refused to tender their shares; NXP’s share price has exceeded $110 since late summer.
Following Qualcomm’s increased offer for NXP, Broadcom lowered its offer for Qualcomm to $79 per share. It also said it would pay $82 per share if Qualcomm is unable to complete the NXP deal.
The earlier, $82 per share offer “materially undervalues” Qualcomm, the Qualcomm board reiterated on Feb. 23.