Qualcomm has firmly rejected Broadcom's unsolicited offer to acquire the company, deeming the $130 billion offered as a "significant undervaluation."
Last week, Broadcom offered to acquire Qualcomm in a deal worth $130 billion, including debt, which would equate to $70 per share in cash and Broadcom stock for shareholders.
At the time of writing, Qualcomm shares are priced at $65.50 pre-market.
Broadcom said there are "compelling financial benefits" to such a deal and Qualcomm's portfolio and global market reach would be complementary to Broadcom's business.
However, it seems that for now, at least, a merger is not on the table.
On Monday, Qualcomm said in a press release that the San Diego, Calif.-based company's Board of Directors has unanimously rejected the proposed deal.
"It is the board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects," said Paul Jacobs, Executive chairman and chairman of the Qualcomm board.
Qualcomm CEO Steve Mollenkopf added that the US chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas.
As such, Qualcomm expects to generate "significant additional value" for shareholders in the future, especially with the prospect of 5G networking on the horizon.
However, it is not just a potential undervaluation which has set the board against the unsolicited proposal.
In addition, according to Presiding Director of Qualcomm Tom Horton, there was also "significant regulatory uncertainty" which put Qualcomm on edge -- which could have led to outright regulatory rejection, complicated discussions, and a long road to meet legal requirements and maintain value.
"After a comprehensive review, conducted in consultation with our financial and legal advisors, the board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty," Horton said. "We are highly confident that the strategy Steve and his team are executing on provides far superior value to Qualcomm shareholders than the proposed offer."
In an update, Broadcom said the company remains "fully committed" to a potential deal.
"This transaction will create a strong, global company with an impressive portfolio of industry-leading technologies and products, and we have received positive feedback from key customers about this combination," said Hock Tan, Broadcom CEO. "We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction."
"Many have expressed to us their desire that Qualcomm meet with us to discuss our proposal," the executive added. "It remains our strong preference to engage cooperatively with Qualcomm's board of directors and management team."