Broadcom could make offer for Apple foe Qualcomm this weekend

AppleInsider

Chipmaker Broadcom is allegedly planning to bid for Qualcomm, in a move which could have major ramifications for the latter's ongoing legal battles with Apple.

An offer could be made as soon as this weekend, according to sources for Bloomberg and Reuters. Broadcom is said to be talking to advisers, and considering a proposal of roughly $70 per share that would include cash and stock -- valuing Qualcomm at $103.2 billion, or 27.6 percent more than its Thursday stock market close.

The rumors coincide with news from U.S. President Donald Trump that Broadcom is planning to redomicile in the States -- currently, the company is incorporated in Singapore, with headquarters there and in San Jose, Calif. Broadcom CEO Hock Tan cited Republican efforts towards corporate-friendly taxes.

The company is known for its Wi-Fi modules and has been a regular Apple supplier, including the iPhone X. Buying Qualcomm would immediately thrust it into a leading position in cellular modems, as well as mobile CPUs -- many Android phones use one of Qualcomm's Snapdragon processors.

Broadcom is still in the middle of a $5.5 billion takeover of Brocade Communications Systems, while Qualcomm is closing a $38 billion deal for NXP Semiconductors.

It's unknown at this stage whether Broadcom would want to maintain Qualcomm's legal claims against Apple or come to some sort of settlement. There are now a number of suits and countersuits in progress worldwide, the most recent of which accuses Apple of sharing software secrets with Intel.

Apple is a particularly lucrative client for suppliers, which could give Broadcom incentive to reconcile.

cgWerks

Heck of a good way to get a deal on a company though, huh?

hmurchison

Bad idea. 

The idea isn't to replace Qualcomm with a company with more hegemonic power. 

chasm

I don't know if this is a bad idea or not, but I'd rather see Qualcomm forced to re-examine their fishy business and licensing models first. I'd also note that the Broadcom CEO seems to be taking the passage of yet more big corporate tax breaks rather for granted, when as we've seen promised legislation is not always a done deal.

gatorguy

hmurchison said:

Bad idea. 

The idea isn't to replace Qualcomm with a company with more hegemonic power. 

Exactly correct. This has the potential to really limit Apple's bargaining power if the sale goes thru. 

SpamSandwich

gatorguy said:

hmurchison said:

Bad idea. 

The idea isn't to replace Qualcomm with a company with more hegemonic power. 

Exactly correct. This has the potential to really limit Apple's bargaining power if the sale goes thru. 

How so? Apple is rumored to be working on an alternative to Qualcomm licensing anyway.

gatorguy

SpamSandwich said:

gatorguy said:

hmurchison said:

Bad idea. 

The idea isn't to replace Qualcomm with a company with more hegemonic power. 

Exactly correct. This has the potential to really limit Apple's bargaining power if the sale goes thru. 

How so? Apple is rumored to be working on an alternative to Qualcomm licensing anyway.

Because they won't be able to avoid both Qualcomm IP and Broadcomm IP.  They won't be paying perhaps as much as $100B for Qualcomm and not expect to recoup the money primarily thru licensing which becomes part and parcel of a Broadcom contract. 

gregg thurman

Sounds like fake news.

Qualcomm buys NXP for $38 Billion (no deal yet), then is offered $103 Billion for the aggregate?  That values Qualcomm alone at $65 Billion.  A $65 Billion valuation is a massive discount (44%) to today's Closing print ($61.81).  A 27% premium would be $78 before the acquisition of NXP.  Not going to happen - ever.

Some rumor monger didn't do his math before he made this up.

maestro64

The article should say Avago is buying QCOM not broadcom, since Avago owns broadcom. It does not surprise me Avago would try and buy QCOM, they have been buying chip companies like crazy.

roake

gregg thurman said:

Sounds like fake news.

Qualcomm buys NXP for $38 Billion (no deal yet), then is offered $103 Billion for the aggregate?  That values Qualcomm alone at $65 Billion.  A $65 Billion valuation is a massive discount (44%) to today's Closing print ($61.81).  A 27% premium would be $78 before the acquisition of NXP.  Not going to happen - ever.

Some rumor monger didn't do his math before he made this up.

Life is simple in someone's world...

9secondkox2

Qualcomm is tanking fast. It's only hope is a buyout. I mentioned recently it will either fold or be sold. 

Personally, they have such integral properties, that it wouldn't be a bad move for Apple to purchase them. 

They can beat broadcoms bid snd still have 160 billion in savings. 

Or... they can prove Qualcomms patents are industry standards and make their own stuff - something they seem to be ridiculously good at these days. 

ksec

gatorguy said:

SpamSandwich said:

gatorguy said:

hmurchison said:

Bad idea. 

The idea isn't to replace Qualcomm with a company with more hegemonic power. 

Exactly correct. This has the potential to really limit Apple's bargaining power if the sale goes thru. 

How so? Apple is rumored to be working on an alternative to Qualcomm licensing anyway.

Because they won't be able to avoid both Qualcomm IP and Broadcomm IP.  They won't be paying perhaps as much as $100B for Qualcomm and not expect to recoup the money primarily thru licensing which becomes part and parcel of a Broadcom contract. 

I actually think this is in flavor of Apple. It is not that Apple doesn't want patents or pay patents fees, ( Otherwise they would have joined the OpenMediaAlliance instead of going to H.265 ), Apple wants to pay a fairer amount, Not the 5 times then all other cellular patents fees combined.

The problem is Qualcomm actually have lots of patents that doesn't involve the modem or baseband. And those are not part of the FRAND.

I believe Qualcomm in Broadcom's hand will means a much better deal for Apple.

And if somehow Apple decide to help Broadcom in finance their $100B take over, ( Like $20B oversea Funding since Broadcom is still based in Singapore, along with some Interest rate. ), the overall financial structure should mean Apple gets a deep discount on patents.

SpamSandwich

9secondkox2 said:

Qualcomm is tanking fast. It's only hope is a buyout. I mentioned recently it will either fold or be sold. 

Personally, they have such integral properties, that it wouldn't be a bad move for Apple to purchase them. 

They can beat broadcoms bid snd still have 160 billion in savings. 

Or... they can prove Qualcomms patents are industry standards and make their own stuff - something they seem to be ridiculously good at these days. 

A hostile takeover by Apple would be a genius move.

gatorguy

gregg thurman said:

Sounds like fake news.

Qualcomm buys NXP for $38 Billion (no deal yet), then is offered $103 Billion for the aggregate?  That values Qualcomm alone at $65 Billion.  A $65 Billion valuation is a massive discount (44%) to today's Closing print ($61.81).  A 27% premium would be $78 before the acquisition of NXP.  Not going to happen - ever.

Some rumor monger didn't do his math before he made this up.

Huh. Not so made up after all. The bid is $105B.

SpamSandwich

https://www.wsj.com/articles/broadcom-proposes-to-acquire-qualcomm-for-70-per-share-1509971816

SpamSandwich

Also, looks like the Supreme Court shot down Samsung. Nice.

http://fortune.com/2017/11/06/apple-samsung-supreme-court-3/

gatorguy

SpamSandwich said:

Also, looks like the Supreme Court shot down Samsung. Nice.

http://fortune.com/2017/11/06/apple-samsung-supreme-court-3/

Saw that.