Qualcomm Technologies Inc. rejected Broadcom Ltd.’s record-breaking $121 billion takeover bid late Thursday in the second such rebuff since the latter company made its initial offer last year.

But although the proposal was shot down, it seemed to have achieved Broadcom’s reported goal of bringing the chipmaker to the negotiating table. In conjunction with the rejection of the offer, Qualcomm Executive Chairman Paul Jacobs issued a public letter calling for a meeting to discuss the financial terms. Broadcom said it “welcomes” the move in an official response this morning and expressed a willingness to sweeten the deal.

Specifically, the company is offering to pay a hefty $8 billion termination penalty in the event that the merger is accepted by Broadcom but doesn’t receive regulatory approval. Qualcomm would also get an annual “ticking” fee if securing antitrust authorities’ blessing takes more than a year. The proposed fee is set at 6 percent of the $121 billion bid’s cash portion.

The counteroffer tackles one of the two core concerns that Qualcomm’s chairman raised in his letter. “It is indisputable that there are significant regulatory hurdles in your proposed transaction,” Jacobs wrote. “It is also indisputable that if Qualcomm entered into a merger agreement and, after an extended regulatory review period the transaction did not close, Qualcomm would be enormously and irreparably damaged.”

Yet while the new proposal addresses this aspect of Qualcomm’s argument, the second and more difficult issue remains a sticking point. Broadcom Chief Executive Officer Hock Tan said in a statement that the $121 billion offer the chipmaker had rejected as too low on Tuesday is “our best and final offer.”

The Financial Times cited sources close to Qualcomm as saying that the breakup fee won’t be enough to win over the board. The insiders added that the companies are set to hold their meeting on Tuesday, the same day they’re scheduled to consult with financial advisors about a crucial shareholder vote scheduled for March 6. Qualcomm investors will decide if they want to replace the current board with directors nominated by Broadcom who would accept the $121 billion offer.

Image: Qualcomm