San Francisco (AFP) – Qualcomm said Wednesday its board would “promptly” consider a hostile $121 billion takeover bid by Singapore-based Broadcom following a meeting of top executives of the two computer chipmaking giants.
“We met with representatives of Broadcom for two hours earlier today, and listened carefully to what they had to say,” Qualcomm said in a statement.
“The Qualcomm board will promptly meet to discuss the meeting and to determine next steps.”
The meeting comes with Broadcom stepping up pressure on its US rival to accept a takeover bid which would be the largest-ever in the technology sector.
Qualcomm chairman Paul Jacobs and chief executive Steve Mollenkopf were among the executives of the California-based firm at Wednesday’s meeting, according to the statement.
Broadcom announced on Friday that it would pay Qualcomm $8 billion if regulators fail to approve the planned tie-up.
The “termination fee” offer came a day after Qualcomm rejected a record $121 billion hostile bid as too low, while citing a risk that the proposed tie-up could be blocked by regulatory authorities.
Broadcom — which has announced plans to move back to the United States — offered $60 per share in cash plus $22 in Broadcom stock, in a deal worth $121 billion, along with the assumption of $25 billion in Qualcomm debt.
If completed, the deal would be the largest-ever in the tech sector and create a powerful player in the booming sector fueled by growth in smartphones and an array of connected devices from cars to wearables.
The rich offer puts pressure on Qualcomm’s board ahead of the California-based company’s March 6 annual meeting, where it must show it is acting in the best interests of shareholders.
Broadcom this week modified its proposal for a slate of Qualcomm board members, calling for six new members — who would presumably look favorably on the hostile bid — instead of an entire new board of 11 members.
Any merger deal would need to pass muster with regulators in the United States and other markets.