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QCOM 65.34+1.0%2:39 PM ESTNews

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From: Jim Mullens12/7/2017 4:30:24 PM
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Evaluating Broadcom's Qualcomm Acquisition Offer



Snips>>>>

+ Qualcomm is indeed undervalued at the $70 per share offered in early November, and Broadcom’s second offer will likely be in the $80 - $90 range, presenting investors with a short term consolidation play.



+ Using a mix of median EV/EBITDA multiples and perpetuity growth of long-term US GDP growth to find the appropriate terminal values, both yielded prices in the $85 - $105 range, which is in line with current market expectation of a premium to the initial Broadcom offer.

Broadcom’s $130B offer slightly surpasses Qualcomm’s market value of capital of $123B, a 5.6% premium. Given that M&A premiums are typically in the 25% - 35% range and markets are surging, Qualcomm is right to wait for the right offer. The lower M&A offer with a 25% premium would be $153.75B, which translates to a value of $89.50 per share. The upper band, a 35% premium, translates to $166.05B offer and a price of $97.81 per share.



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https://seekingalpha.com/article/4130503-broadcom-and-qualcomm-price-right?auth_param=5bbnd:1d2jajn:ee5ec0fa35aa821955a2c3cab8c5d1ab&uprof=46#alt2

Evaluating Broadcom's Qualcomm Acquisition Offer

Dec. 7, 2017 3:53 PM ET

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| About: Qualcomm Inc. (QCOM), Includes: AVGO

by: Javier Rojas



Javier Rojas
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