But Qualcomm's beaten down stock price showed far less optimism among investors that a deal could be consummated quickly.
Qualcomm rejected an unsolicited, $103 billion offer from Broadcom, saying that the proposal is significantly undervalued and that a tie-up between the massive chipmakers would face substantial regulatory resistance.
"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 of Qualcomm.
The source said Qualcomm's board of directors could huddle up on Sunday to examine the unsolicited acquisition bid and think of its strategy. Keep in mind, this offer from Broadcom wasn't solicited, so it isn't as if Qualcomm and Broadcom were in talks about a merger before Broadcom plopped its $130 billion bid on the table. Tom Horton, the company's Presiding Director of Qualcomm, Inc., also said that the uncertainty of the proposed acquisition also had something to do with the rejection.
San Diego-based Qualcomm said the bid undervalues the company's position in thriving areas in the semiconductor industry like mobile, "internet of things", automotive, edge computing and.
Broadcom's proposal came days after its CEO Hock Tan appeared at the White House with President Donald Trump to announce plans to move the tech company back to the United States from Singapore. We are not sure whether Broadcom can initiate a proxy fight to get the deal approval from Qualcomm's board. Broadcom did not immediately return a request for comment.
Qualcomm provides chips to carrier networks to deliver broadband and mobile data.
Shares of Qualcomm were up 1.8 percent at $65.74 in early afternoon trading, while those of Broadcom were down 0.4 percent at $263.95. If Qualcomm had approved the deal, the combined company would have created major changes in the chipmaking industry.
This could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer.