Broadcom Goes After Qualcomm's Board As Part Of Takeover Bid

Broadcom Goes After Qualcomm's Board As Part Of Takeover Bid

Broadcom, which has signaled its plan to reincorporate in the United States, said the effort to replace the Qualcomm board members is aimed at boosting support for its bid to create a semiconductor firm that dominates in the growing field of mobile technology.

Qualcomm reiterated that the bid "dramatically undervalues" the company and carries "significant" regulatory uncertainty.

Broadcom said on December 4 that it plans to propose 11 directors for the board of Qualcomm, the rival chipmaker it offered to acquire for roughly $105 billion in cash and stock.

The recruitment pool, which includes a former president of Nokia's the Mobile Networks group and a former director and chairman of the board of Dialog Semiconductor, would oversee Qualcomm's day-to-day operations until a deal with Broadcom closed.

Broadcom has said regulators may take a year to approve an acquisition of Qualcomm, while Qualcomm has countered that the regulatory review process globally could last much longer and is fraught with risks. "We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities".

Hock Tan, chief exec of Broadcom, fired back: "We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us. The nominations give ... stockholders an opportunity to voice their disappointment". Qualcomm's Board is composed of 11 world-class directors, 9 of whom are independent and 4 of whom have been added in the last 3 years, and all of whom are firmly committed to acting in the best interests of all Qualcomm stockholders.

Seventy-eight of Qualcomm's stocks are owned by institutional investors.

Qualcomm's board current board consists of company executives, including CEO Steve Mollenkopf and former CEO Paul E. Jacobs, private equity investors, consultants and executives at tech companies.

A sign to the campus offices of chip maker Broadcom Ltd, who announced on Monday an unsolicited bid to buy peer Qualcomm Inc for $103 billion, is shown in Irvine, California, U.S., November 6, 2017.

Broadcom remains confident that it can clear any regulatory requirements needed to complete the deal, including satisfying antitrust authorities, Tan said. However, Qualcomm argues that Broadcom is being opportunistic and seeks to exploit the recent drop in its stock price to pull off an acquisition on the cheap at shareholders' expense.

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