Broadcom Ltd. AVGO 2.58% secured as much as $ 100 billion of debt financing for its hostile bid for Qualcomm Inc. QCOM 2.52% and enlisted two more big private-equity firms, strengthening the chip giant’s hand in the takeover battle.
A dozen banks—including Bank of America Corp. , Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Morgan Stanley —have agreed to provide up to $ 100 billion of committed credit facilities, including a $ 5 billion revolver and bridge financing, according to people familiar with the matter.
Private-equity firms KKR KKR 0.52% & Co. and CVC Capital Partners agreed to join Silver Lake in providing $ 6 billion in convertible debt for the deal and postclosing working-capital needs, the people said.
Broadcom has been in pursuit of Qualcomm since November and has nominated a slate of directors that would be voted on at a meeting in early March. Broadcom a week ago raised its bid to $ 82 a share in cash and stock, or more than $ 120 billion.
The commitments would enable Broadcom to fully fund the $ 60 a share cash portion of the bid.
Locking down funding for the deal would remove a major question mark over Broadcom’s bid for Qualcomm, which, if successful, would be the biggest technology takeover ever.
Adding two sophisticated investors could also help propel the effort.
But it still faces major hurdles. Qualcomm has said the price is still too low and faces steep regulatory risks. It has agreed to discuss the takeover attempt with Broadcom, and the two sides were expected to convene early this coming week.
Silver Lake, which has been a big backer of Broadcom and its chief executive, Hock Tan, had already pledged $ 5 billion in convertible debt to back the bid.
As much as half of that would come from the firm’s coffers, the buyout firm indicated, making it Silver Lake’s largest investment ever.
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Appeared in the February 12, 2018, print edition as ‘Broadcom Lines Up Qualcomm Financing.’