SAN FRANCISCO — Qualcomm again rejected a $121 billion acquisition offer from Broadcom after a meeting between the two companies last week, but a prominent shareholder advisory firm recommended that Qualcomm continue to engage in negotiations on a deal.

In a letter to Broadcom President and CEO Hock Tan Friday (Feb. 16), Qualcomm said its board of directors once again unanimously rejected Broadcom's takeover bid as too low, but said the company was willing to engage in further discussions.

Qualcomm said Broadcom representatives expressed a willingness to agree to anti-trust related divestitures but resisted other commitments that might be required by regulatory bodies.

“Broadcom also declined to respond to any questions about its intentions for the future of Qualcomm’s licensing business, which makes it very difficult to predict the antitrust-related remedies that might be required,” Qualcomm Chairman Paul Jacobs said in the letter to Tan. “In addition, Broadcom insists on controlling all material decisions regarding our valuable licensing business during the extended period between signing and a potential closing, which would be problematic and not permitted under antitrust laws.”

Paul Jacobs

Also Friday, Institutional Shareholder Services (ISS), an advisory firm that serves institutional shareholders, recommended that Qualcomm shareholders vote for four of the six people that Broadcom nominated to Qualcomm's board in a hostile takeover attempt. ISS recommended that Qualcomm continue to negotiate with Broadcom with an eye toward reaching an acquisition agreement that would be favorable to Qualcomm shareholders.

Broadcom has said that its revised $121 billion offer to acquire Qualcomm for $82 per share is its “best and final” offer. The proposal also includes an $8 billion “reverse break up fee” payable to Qualcomm in the event that the deal does not secure regulatory approval, one of the highest such contingencies ever offered in an acquisition proposal.

Qualcomm has previously said the offer undervalues Qualcomm and that the risks that a deal would not be approved by regulators is substantial to the company's licensing and product businesses.

— Dylan McGrath is the editor-in-chief of EE Times.