Qualcomm says that it is ready to discuss a better buyout offer from rival Broadcom

Qualcomm Inc is open to discussing a buyout offer from Broadcom Ltd that “reflects the true value” of the chipmaker and better addresses its concerns about potential regulatory hurdles to a deal, the company said on Friday.

Representational image. Qualcomm

Qualcomm said it had a “constructive” meeting with Broadcom on 14 February, the first time the two companies met to discuss the existing $121 billion offer.

However, Qualcomm’s board maintained its view that the proposal materially undervalues the chipmaker, has an unacceptably high level of risk and is not in the best interests of its stockholders.

Though Singapore-based Broadcom was willing to certain divestitures to satisfy antitrust regulators, it was still resistant to “other commitments that could be expected” to be required by government regulatory bodies, Qualcomm said.

Broadcom also declined to comment on its intentions for the future of Qualcomm’s licensing business, the company said. Qualcomm again said Broadcom’s promised breakup fee of $8 billion in the event regulators thwart the deal did not come close to compensating for risks related to the deal.

Broadcom was not immediately available for a comment. Broadcom’s top executives left the Feb. 14 meeting with the impression that their Qualcomm counterparts listened to them but did not engage, Reuters reported on Wednesday. Shares of Qualcomm and Broadcom were marginally up in early morning trading on Friday.