Qualcomm Inc., a target of a so far hostile bid by Broadcom Ltd. to purchase it, proposed on Monday to initially work on "key issues other than price," including a non-disclosure agreement and reverse termination fee of 9% of enterprise value. Chairman of the Board Paul Jacobs (pictured) wrote a letter to Hock Tan, head of the Singapore-incorporated chipmaker, referring to a second meeting on the issue, held on February 23. He called for "mutual due diligence."
The price, which is still considered to be undervaluing the company based in San Diego, can be addressed after regulatory and deal certainty issues, the update revealed and signaled progress has already been made in the area. Qualcomm suggested to "jointly select a law firm with antitrust expertise" to brief it on licensing plans and avoid Broadcom's legal concerns that way.
"The path forward does not require a 'hell or high water' commitment on the regulatory front, but still provides the appropriate level of protection to Qualcomm stockholders commensurate with the high degree of regulatory risk associated with this potential transaction. If acceptable to Broadcom, this would resolve all issues between the two companies other than price," Jacobs added. Broad is co-headquartered in San Jose.