According to a report in the WSJ, Qualcomm, now embroiled in a number of lawsuits with Apple, is apparently about to receive an unsolicited takeover bid from semiconductor designer Broadcom. They closed up 13 percent at $61.81, valuing the company at $91 billion.
An offer of $70 a share in cash and stock for the maker of technology for mobile devices could be coming in a matter of days, perhaps as soon as this weekend, the reports said.
With its profits plummeted more than 90 percent in the latest earnings call, Qualcomm could be fighting a losing legal battle with Apple, giving Broadcom the flawless opportunity to acquire the chipmaker in what could be the largest chip business acquisition ever.
Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others. Shares of Qualcomm jumped 12.7 percent to $61.81, while Broadcom's stock climbed almost 6 percent to $273.63 on Friday afternoon. A legal battle with Apple is costing revenue and jeopardizing a business model that for years made Qualcomm one of the most successful chipmakers.
Qualcomm and Apple have been embroiled in a dispute over royalties that has landed the two corporations in court. Apple contends Qualcomm is unfairly charging too much and illegally taking advantage of its market position in chips.
This comes at a time when Qualcomm itself is trying to complete a $47 billion purchase of NXP Semiconductors. The deal is facing regulatory examination in Europe and opposition from some shareholders including activist hedge fund firm Elliott Management Corp., which has argued the offer undervalues NXP. Broadcom already provides Apple with components present in the iPhone and the acquisition could mean it will become enlarged enough to become the third-largest chipmaker, trailing behind Samsung and Intel.