Updated at 8:40 am., Monday, Nov. 13

Qualcomm said Monday its board of directors unanimously rejected Broadcom’s $130 billion buyout offer because it “dramatically undervalues” the San Diego-based wireless pioneer.

“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, chairman of the board.

The announcement came before financial markets opened on Wall Street, and Qualcomm’s stock later rose 1.5 percent to over $65.50 in early trading.

Chief Executive Steve Mollenkopf said shareholders stood to gain more from the company’s continued growth than to sell the company now.

“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” Mollenkopf said.

Director Tom Horton said that the proposal both “dramatically undervalues Qualcomm” and “comes with significant regulatory uncertainty.”

Broadcom’s unsolicited proposal is for $60 in cash and $10 in Broadcom stock for all outstanding shares. The transaction would be valued at $130 billion.

Broadcom issued a statement saying it remains fully committed to pursuing an acquisition of
Qualcomm and noted that its offer represents a 28 percent premium over the recent stock price.

“This transaction will create a strong, global company with an impressive portfolio of industry-leading technologies and products, and we have received positive feedback from key customers about this combination,” said Hock Tan, president and chief executive officer of Broadcom.

“It remains our strong preference to engage cooperatively with Qualcomm’s board of directors and management team,” he added.

>> Subscribe to Times of San Diego’s free daily email newsletter! Click here