Qualcomm rejects Broadcom offer, says it's open to a better deal

People crowd into the Qualcomm booth to view a series of new products during the annual Consumer Electronics Show on Jan. 4, 2017 in Las Vegas.
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Qualcomm is open to discussing a buyout offer from Broadcom 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.

Qualcomm said it had a "constructive" meeting with Broadcom on Feb. 14, 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.