WASHINGTON (AFP) – Broadcom raised its bid for rival computer chipmaker Qualcomm on Monday to $121 billion, offering the richest-ever takeover effort in the tech sector in an effort to become the dominant player in the fast-growing market for connected devices.
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Singapore-based Broadcom, which has begun a process to reincorporate in the US, called the hostile bid its “best and final offer.”
The price hike steps up the pressure on California-based Qualcomm, the dominant producer of chips for mobile devices, which is set to hold its annual shareholders meeting next month.
In a letter to Qualcomm board members, Broadcom chief executive Hock Tan called the offer “extremely compelling compared to any other alternative available to Qualcomm” and called on the board to open talks on the proposal. But he said the deal would be off the table if it fails to win approval next month by shareholders.
The new bid represents $82 per Qualcomm share, up from a previous offer of $70 a share, and was said to be 50 percent higher than Qualcomm’s share price before the tie-up was proposed in November.
With Qualcomm’s debt included, the deal’s value would be some $146 billion.
“We continue to hope you choose to engage with us for the benefit of your stockholders,” Mr Tan said.
“However, we will withdraw this proposal and cease our pursuit of Qualcomm immediately following your upcoming annual meeting unless we have entered into a definitive agreement or the Broadcom-nominated slate is elected.”
Broadcom last year proposed a slate of 11 new Qualcomm board members as part of its effort to win approval.
Qualcomm said in a statement it had received the new proposal and would evaluate it “consistent with its fiduciary duties” and “in consultation with its financial and legal advisors”.