Qualcomm rejected Broadcom’s $105 billion acquisition offer, kicking off what would be the largest technology takeover battle in history.

The San Diego-based company recommended shareholders spurn the deal, saying it’s an opportunistic move by Broadcom to buy the wireless-chip maker on the cheap. Qualcomm also said the transaction may face regulatory scrutiny that would cast doubt on its completion.

Associated Press/Mark Schiefelbein Qualcomm said it's rejecting an unsolicited offer from Broadcom, saying that the proposal is significantly undervalued.

The rebuff ratchets up pressure on Broadcom to sweeten its offer, or embark on a proxy battle, which carries its own risk of rejection by shareholders. For now, Broadcom said it remains “fully committed” to going ahead with the purchase.

“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, executive chairman and chairman of the board of Qualcomm, in a statement.

Broadcom Chief Executive Officer Hock Tan on Nov. 6 offered $70 a share in cash and stock for Qualcomm, seeking to build a powerhouse that leads the market for wireless chips in devices like iPhones. Even before Qualcomm’s response, Tan and his advisers were preparing to wage a proxy battle in which they appeal directly to Qualcomm investors.

Qualcomm rose 2.2 percent to $65.96 at 11:17 a.m. in New York Monday. Since the offer from Broadcom, it has traded below the bid price on skepticism that a transaction can be completed. Broadcom shares were little changed Monday.

Tan said he’s pleased with the reaction he’s already received from Qualcomm shareholders and customers regarding his proposal and would prefer to keep the negotiations friendly.

“We have received positive feedback from key customers about this combination,” he said in a statement following Qualcomm’s rejection. “We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction.”

Buying Qualcomm would reshape the chipmaking industry, transforming Broadcom into the third-largest semiconductor maker, behind Intel Corp. and Samsung Electronics.

“Qualcomm shareholders are likely to hold out for more, but we believe something in the $80-ish range is likely enough to bring most of them around,” Stacy Rasgon an analyst at Sanford C. Bernstein wrote in a note published over the weekend. Broadcom is unlikely to walk away given that there is significant headroom to find a deal acceptable to Qualcomm shareholders, he added.

Tan, who has built Broadcom through a series of transactions that have helped reshape the $300 billion semiconductor industry, has previously been able to pull off deals with friendly approaches. Acquiring Qualcomm is further complicated by his target’s own push to close a more than $40 billion purchase of NXP Semiconductors. That purchase is being held up by regulatory approval. Tan said his offer for Qualcomm stands with or without Qualcomm’s acquisition of NXP.

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