Qualcomm Says Broadcom Action Blatant Attempt To Seize Control Of Its Board

Reuters

Reuters

"Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm", Tan said.

In what appears to be turning into an increasingly hostile takeover, Broadcom is turning up the pressure on its $130 billion bid to purchase competitor Qualcomm by directly addressing the latter company's shareholders. Last month, Qualcomm said its directors had unanimously rejected the bid, leaving Broadcom with the option to take the issue to shareholders by proposing a board slate who would back it. Qualcomm would most likely vigorously oppose Broadcom's nominees. (QCOM) confirmed receipt of Broadcom Limited's (AVGO) nomination of a slate of eleven candidates to replace Qualcomm's existing board of directors at the company's 2018 Annual Meeting of Stockholders.

People close to Qualcomm's management have dismissed Broadcom's takeover approach as an opportunistic attempt to capitalise on its current weaknesses.

The San Diego company also cited a number of problems with Broadcom's offer, including regulatory issues, lack of financing and uncertainty surrounding Broadcom's move from Singapore to San Jose.

Tom Horton, Qualcomm's presiding director, said no company is better positioned than Qualcomm to bring mobile technologies to these industries.

In its own statement, Broadcom said its proposal represented a 28 percent premium over the closing price of Qualcomm's common stock on November 2.

"In light of the significant value our proposal provides for Qualcomm stockholders, we believe Qualcomm stockholders would be better served by new independent, highly qualified nominees who are committed to maximizing value and acting in the best interests of Qualcomm stockholders", Tan said.

"We also continue to receive positive feedback from customers and, having had initial meetings with certain relevant antitrust authorities, remain confident that any regulatory requirements necessary to complete a combination will be met in a timely manner", he said.

Qualcomm said Monday that the Broadcom offer undervalues Qualcomm's growth prospects in the Internet of Things, 5G, automotive and data center networking markets.

Qualcomm shares fell 1.8 percent, while Broadcom lost 2.2 percent. The deal would consist of $60 in cash and $10 per share in Broadcom stock.

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