Qualcomm shares surge 15% on talk of takeover by Broadcom

Broadcom Plans Unsolicited Bid for Qualcomm

Shares of Qualcomm have spiked after reports from the Wall Street Journal and Bloomberg News that rival chipmaker Broadcom may be preparing a bid.

The value of Broadcom's bid has not been decided, though an offer in the range of around $70 to $80 per share is being contemplated, one of the sources said.

According to Bloomberg, Broadcom is now in talks with advisers on how to best approach the potential bid, which is likely to be made official in the next few days. Broadcom rose 5.5 percent, for a market valuation of about $112 billion.

Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others.

Broadcom, meanwhile, announced it would return its corporate headquarters to the USA, in San Jose.

- Shares in Broadcom, which makes semiconductors for networking and wireless equipment, were up almost 5 percent in afternoon trading on the Nasdaq.

Most recently, Qualcomm filed yet another lawsuit against Apple, with the chipmaker accusing the iPhone maker of breaching a software license contract. But previous year, Apple limited the use of Qualcomm's modems to CDMA versions of the Apple iPhone 7 and Apple iPhone 7 Plus, while Intel supplied the chips for the GSM variant.

At issue between Qualcomm and Apple are licensing fees the chipmaker charges for patents that cover the basics of how mobile phone systems work. As a result, there is talk that the 2018 iPhone and iPad models will feature modem chips made by Intel and MediaTek. Apple contends Qualcomm is unfairly charging too much and illegally taking advantage of its market position in chips.

It's unclear how the deal could affect Qualcomm's own blockbuster $40 billion takeover of NXP Semiconductors, which was announced past year but still hasn't been completed.

Aside from the financial challenges of such a large deal, Broadcom may also encounter close regulatory scrutiny. Broadcom is also a major supplier to numerous same companies for Wi-Fi chips.

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