Qualcomm is going to do whatever it takes to fend off Broadcom (QCOM, AVGO)

• Broadcom intensified its hostile bid to buy Qualcomm on Monday, saying it was still interested in buying the company after being rejected.
• Last week, Broadcom offered to buy Qualcomm in a $105 billion deal that would be the largest-ever in tech.
• Qualcomm said its rival’s offer of $70 per share significantly undervalued the company.

---

The semiconductor giant Broadcom has intensified its hostile bid to buy Qualcomm.

A week ago, Broadcom said it made a $70-per-share offer to Qualcomm shareholders that consists of $60 in cash and $10 in Broadcom shares.

Then earlier on Monday, Qualcomm rejected the offer, confirming reports that said its board thought Broadcom’s offer was too low. “Broadcom’s proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, the executive chairman of Qualcomm, in a release.

But Broadcom is not giving up. In a follow-up statement, CEO Hock Tan said it was his company’s “strong preference” to continue to engage with Qualcomm’s board and management team.

And with that response, the hostile takeover bid entered full swing.

The stakes are high. The combined company would be the world’s third-largest chipmaker behind Intel and Samsung. A tie-up between the two semiconductor companies would be the largest-ever tech acquisition, surpassing the $60 billion deal between Dell and EMC in 2016. And, it would be the third-largest M&A deal on record, according to Dealogic.

Broadcom is trying to grow its share of the market for components that go into mobile phones. It’s also making a timely bid for Qualcomm, whose earnings this year have been hurt by a global lawsuit with Apple over its licensing fees for patents.

There are three ways Broadcom can prevail, according to a team of Nomura analysts including Romit Shah. In a note on Friday, they said:

• Broadcom could nominate directors to be voted on at Qualcomm’s annual meeting. The deadline is December 8.
• If Broadcom misses the deadline, it could launch a public exchange offer for all Qualcomm shares that would take its bid directly to shareholders.
• Broadcom could seek regulatory approval for the deal before negotiating a new offer price to build the credibility of its bid. A deal is likely to draw the ire of the US Department of Justice for antitrust concerns.