- The day after the biggest-ever tech takeover was proposed, presumptive acquirer Broadcom (NASDAQ:AVGO) is 2.5% lower while Qualcomm (NASDAQ:QCOM) is up another 2.1% (up nearly 15% since midday Friday).
- The $70/share offer may not be enough for some shareholders, according to various reports, including a CTFN report that says large holders claim they'd reject an offer below $80/share. (Qualcomm is trading at $68.86 currently.)
- SunTrust's William Stein raised his price target on Broadcom to $325/share from $281/share, implying 20% upside from today's lower price. "Despite increasing complexity, and competitors' and potential targets' counter-moves, we believe CEO Hock Tan has thought several moves deep & has a track record that demonstrates his ability to use M&A to drive earnings," he writes, adding the deal will more likely get driven to completion than not.
- The deal's "strategically and financially compelling," says MKM's Ruben Roy, who says "We believe that the increased scale and product and end market diversification would potentially drive stronger profitability metrics for a combined entity."
- While Qualcomm shareholders wait for a higher bid (it's currently $60/share in cash and $10/share in Broadcom stock), Broadcom is reportedly willing to push a proxy battle if its offer is spurned, Bloomberg reports.
- Now read: Dividend Growth Investors - What Are You Doing About Qualcomm?
Original article