The boards of Qualcomm Incorporated and Aqua Acquisition Sub LLC and the board of Alphawave IP Group plc, Alphawave Semi (LON:AWE) has announced that they have reached agreement on the terms and conditions of a recommended acquisition by Bidco of the entire issued, and to be issued, ordinary share capital of Alphawave.
Cash Offer
· Under the terms of the Acquisition, each Alphawave Shareholder will be entitled to receive:
for each Alphawave Share: US$2.48 in cash (the “Cash Offer”)
· The Cash Offer represents a price of 183 pence per Alphawave Share, based on the Announcement Exchange Rate, and values the entire issued, and to be issued, ordinary share capital of Alphawave at approximately US$2.4 billion, and implies an enterprise value of approximately US$2.4 billion.
· The Cash Offer provides certain value at a significant premium of approximately:
– 96 per cent. to the Closing Price of 94 pence per Alphawave Share on the Unaffected Date;
– 70 per cent. to the volume-weighted average price of 108 pence per Alphawave Share for the 30-day period ended on the Unaffected Date; and
– 59 per cent. to the volume-weighted average price of 115 pence per Alphawave Share for the six-month period ended on the Unaffected Date.
· A facility will be made available under which Alphawave Shareholders will be able to elect (subject to the terms and conditions of such facility) to receive the cash consideration payable in connection with the Cash Offer in Sterling (after, if applicable, deduction of any transaction or dealing costs (including any taxes) associated with the currency conversion) at the applicable market exchange rate on the latest practicable date for fixing such rate prior to the relevant payment date. The amount received by any Alphawave Shareholder validly electing to be paid their cash consideration in Sterling may therefore be below or above 183 pence per Alphawave Share depending on the applicable market exchange rate that is applied.
Alternative Offers
· In addition, as an alternative to the Cash Offer, eligible Alphawave Shareholders may elect, in respect of all (but not part) of their holding of Alphawave Shares, to receive either (in each case in lieu of any cash consideration under the Cash Offer):
for each Alphawave Share: 0.01662 of a New Qualcomm Share (“Alternative Offer 1”)
or
for each Alphawave Share: 0.00964 of a New Series A Qualcomm Exchangeable Security and 0.00698 of a New Series B Qualcomm Exchangeable Security (“Alternative Offer 2”),
each an “Alternative Offer” and together, the “Alternative Offers“.
· Alternative Offer 1 values each Alphawave Share at 183 pence as at the Latest Practicable Date. Alternative Offer 2 values each Alphawave Share at an equivalent value to Alternative Offer 1 on a see-through basis assuming full exchange of the New Qualcomm Exchangeable Securities into Qualcomm Shares in accordance with the terms of the New Qualcomm Exchangeable Securities, and without applying any discount to account for (among other things): (i) such securities not being listed; and (ii) the restrictions to which they are subject prior to such exchange.
· Following completion of the Acquisition, the New Qualcomm Shares to be issued in connection with Alternative Offer 1 will be listed and principally traded on NASDAQ. The New Qualcomm Exchangeable Securities to be issued in connection with Alternative Offer 2 (and the Exchangeable Securities Alternative Offer) will not be listed.
· The Alternative Offers (and the issuance of the New Qualcomm Shares or New Qualcomm Exchangeable Securities to eligible Alphawave Shareholders) are subject to (amongst other things) the receipt of valid elections from eligible electing Alphawave Shareholders. Alphawave Shareholders who do not elect for an Alternative Offer, or who do not make a valid election, will receive the full amount of the cash consideration due to them pursuant to the Cash Offer in respect of their entire holding of Alphawave Shares.
Alphawave Semi dividends
· The Cash Offer (and, if applicable, the consideration due under the terms of the Alternative Offers) assumes that Alphawave Shareholders will not receive any dividend, distribution and/or any other return of capital or value following the date of this Announcement.
· If, on or after the date of this Announcement and on or before the Effective Date, any dividend, distribution and/or other return of capital or value is announced, declared, made, paid or becomes payable in respect of the Alphawave Shares, Qualcomm and Bidco reserve the right to reduce the consideration payable under the terms of the Cash Offer (and, if applicable, the consideration due under the terms of the Alternative Offers) by an amount up to the amount of such dividend, distribution and/or other return of capital or value (taking into account and subject to foreign exchange rate adjustments). In these circumstances, the relevant eligible Alphawave Shareholders will be entitled to receive and retain such dividend, distribution and/or return of capital or value that is announced, declared, made, paid or becomes payable, and any reference in this Announcement (or, as applicable, the Scheme Document or the Offer Document) to the consideration payable under the Cash Offer (and, if applicable, the consideration due under the terms of the Alternative Offers) will be deemed to be a reference to the consideration as so reduced. Any exercise by Qualcomm and Bidco of their rights referred to in this paragraph will be the subject of an announcement and, for the avoidance of doubt, will not be regarded as constituting any revision or variation of the terms of the Scheme or the Acquisition.
Recommendation
· The Alphawave Directors, who have been so advised by Goldman Sachs and BMO as to the financial terms of the Cash Offer, consider the terms of the Cash Offer to be fair and reasonable. In providing their advice to the Alphawave Directors, Goldman Sachs and BMO have taken into account the commercial assessments of the Alphawave Directors. BMO is providing independent financial advice to the Alphawave Directors for the purposes of Rule 3 of the Code.
· Accordingly, the Alphawave Directors intend to unanimously recommend that Alphawave Shareholders vote (or procure voting) in favour of the Scheme at the Court Meeting and the Resolution at the General Meeting (or, in the event that the Acquisition is implemented by way of an Offer, to accept or procure acceptance of such Offer), as those Alphawave Directors who hold or are beneficially entitled to Alphawave Shares have each irrevocably undertaken to do (or procure to be done) in respect of all of their (and their connected persons’) beneficial holdings of direct and indirect interests in Alphawave Shares being, in aggregate, a total of 186,369,523 Alphawave Shares (representing approximately 24.1 per cent. of the Relevant Alphawave Share Capital). The intentions of the Alphawave Directors are set out in paragraph 5.
· The Alphawave Directors, who have been so advised by Goldman Sachs and BMO as to the financial terms of Alternative Offer 1, consider the terms of Alternative Offer 1 to be fair and reasonable. In providing their advice to the Alphawave Directors, Goldman Sachs and BMO have taken into account the commercial assessments of the Alphawave Directors. BMO is providing independent financial advice to the Alphawave Directors for the purposes of Rule 3 of the Code.
· The Alphawave Directors have reviewed the terms of Alternative Offer 2 but, for the reasons described in paragraph 5, the Alphawave Directors are unable to form a view as to whether or not the terms of Alternative Offer 2 are fair and reasonable. Goldman Sachs and BMO are unable to opine as to whether the financial terms of Alternative Offer 2 are fair and reasonable, given the significant and variable impact of the advantages and disadvantages of Alternative Offer 2, as set out in paragraph 5, for individual Alphawave Shareholders.
· In addition to the advantages and disadvantages set out in paragraph 5, the Alphawave Directors note that whilst Alternative Offer 2 enables all Alphawave Shareholders to participate in the Qualcomm Exchangeable Share Structure, the Qualcomm Exchangeable Share Structure has been developed for the purposes of the Exchangeable Securities Offer. Please see paragraph 14 for further information in relation to the Exchangeable Securities Offer. In providing their advice to the Alphawave Directors, Goldman Sachs and BMO have taken into account the commercial assessments of the Alphawave Directors. BMO is providing independent financial advice to the Alphawave Directors for the purposes of Rule 3 of the Code.
· The Alphawave Directors, noting that the advantages and disadvantages of Alternative Offer 1 and Alternative Offer 2 will vary significantly based on the individual circumstances of each individual Alphawave Shareholder, make no recommendation to Alphawave Shareholders in relation to either Alternative Offer 1 or Alternative Offer 2. Alphawave Shareholders are strongly encouraged to take into account such advantages and disadvantages, as well as their particular circumstances, when deciding whether to elect for Alternative Offer 1 or Alternative Offer 2.
· Further information in relation to the Alternative Offers, the New Qualcomm Shares and New Qualcomm Exchangeable Securities (including the advantages and disadvantages, risk factors and other investment considerations, the key rights and restrictions attaching to the New Qualcomm Exchangeable Securities, the intentions of the Alphawave Directors, as well as the further terms and conditions of the Alternative Offers) is set out in paragraphs 5, 12 and 13 and the Qualcomm Exchangeable Securities Term Sheet at Appendix IV (and will be included in the Scheme Document).
Irrevocable undertakings
· Qualcomm and Bidco have received irrevocable undertakings:
– from the Alphawave Directors and Non-Director Alphawave Shareholders to vote (or procure voting) in favour of the Scheme at the Court Meeting and the Resolution at the General Meeting (or, in the event that the Acquisition is implemented by way of an Offer, to accept or procure acceptance of such Offer) in respect of their beneficial holdings of direct and indirect interests in a total of 386,985,999 Alphawave Shares and Relevant Options (representing approximately 50.1 per cent. of the Relevant Alphawave Share Capital); and
– from Tony Pialis, Rajeevan Mahadevan and Jonathan Rogers to elect (or procure an election) to receive New Qualcomm Exchangeable Securities in respect of their entire beneficial holdings of direct and indirect interests in a total of 266,890,336 Alphawave Shares (comprising 8,574,137 Alphawave Shares and 258,316,199 Alphawave Exchangeable Shares), representing approximately 34.5 per cent. of the Relevant Alphawave Share Capital.
Offer Structure, Timetable and Conditions
· It is intended that the Acquisition will be implemented by way of a Court-approved scheme of arrangement under Part 26 of the Companies Act (although Bidco reserves the right to implement the Acquisition by way of an Offer, subject to the consent of the Panel, where necessary, and the terms of the Co-operation Agreement).
· The Acquisition is conditional on, amongst other things: (i) the approval of Alphawave Shareholders of the Scheme at the Court Meeting; (ii) the approval of Alphawave Shareholders of the Resolution to be proposed at the General Meeting; (iii) the satisfaction or waiver of the relevant antitrust approvals, including in the U.S., Germany, South Korea and Canada, and foreign direct investment approvals, including in the UK, in each case if and to the extent required; (iv) the sanction of the Scheme by the Court; and (v) the delivery of a copy of the Court Order to the Registrar of Companies. The Conditions to the Acquisition are set out in full in Appendix I along with certain other terms. The full terms and conditions to the Acquisition will be set out in the Scheme Document.
· The Acquisition will be put to Alphawave Shareholders for approval at the Court Meeting and the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of Alphawave Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Alphawave Shares held and voted by those Alphawave Shareholders. In addition, the Resolution implementing the Scheme must be passed by the requisite majority of Alphawave Shareholders representing at least 75 per cent. of votes cast at the General Meeting.
· It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the associated Forms of Proxy and Form(s) of Election, will be dispatched to Alphawave Shareholders as soon as practicable and, in any event, within 28 days of this Announcement (or such later time as Alphawave, Bidco and the Panel may agree). The Court Meeting and General Meeting are expected to be held as soon as reasonably practicable thereafter.
· The Acquisition is currently expected to complete during the first calendar quarter of 2026, subject to the satisfaction or waiver (where applicable) of the Conditions. An expected timetable of key events relating to the Acquisition will be set out in the Scheme Document.
Commenting on the Acquisition, Tony Pialis, President and Chief Executive Officer of Alphawave, said:
“Qualcomm’s acquisition of Alphawave represents a significant milestone for us and an opportunity for our business to join forces with a respected industry leader and drive value to our customers. By combining our resources and expertise, we will be well-positioned to expand our product offerings, reach a broader customer base, and enhance our technological capabilities. Together, we will unlock new opportunities for growth, drive innovation, and create a leading player in AI compute and connectivity solutions. For our shareholders, the Alphawave Board is pleased that Qualcomm’s offer provides an opportunity to realise compelling value for their shares.“
Commenting on the Acquisition, Cristiano Amon, President and Chief Executive Officer of Qualcomm, said:
“Under Tony’s leadership Alphawave has developed leading high-speed wired connectivity and compute technologies that are complementary to our power-efficient CPU and NPU cores. Qualcomm’s advanced custom processors are a natural fit for data centre workloads. The combined teams share the goal of building advanced technology solutions and enabling next-level connected computing performance across a wide array of high growth areas, including data centre infrastructure.“
This summary should be read in conjunction with, and is subject to, the full text of this Announcement and the Appendices. The Conditions to, and certain further terms of, the Acquisition are set out herein and in Appendix I and the full terms and conditions of the Acquisition will be set out in the Scheme Document. The bases of calculations and sources for certain financial information contained in this Announcement are set out in Appendix II. Details of the irrevocable undertakings received by Qualcomm and Bidco in relation to the Acquisition are set out in Appendix III. The Qualcomm Exchangeable Securities Term Sheet is set out in Appendix IV. Certain definitions and terms used in this Announcement are set out in Appendix V.
