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

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

Qualcomm last month rejected Broadcom's $103 billion cash-and-stock bid, saying it dramatically undervalued the company, a line it repeated in Monday's statement.

Photo Broadcom has proposed a slate of 11 directors to replace the entire board of Qualcomm, setting the stage for a proxy battle over the fate of its unsolicited $105 billion bid for the world's largest maker of smartphone chips.

Qualcomm said it remained opposed to the deal.

The Singapore-based chip maker made an unsolicited offer on November 6 for to acquire Qualcomm for $70.00 per share in cash and stock, a 28 percent premium over the closing price of Qualcomm's stock on November 2. After a comprehensive review, conducted in consultation with its financial and legal advisors, the Board concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty, and therefore is not in the best interests of Qualcomm stockholders. 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.

Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm. "The nominations give ... stockholders an opportunity to voice their disappointment". We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities.

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In a press release, Broadcom noted that it would support a decision by the proposed 11 new directors to increase the size of Qualcomm's board and reappoint three current directors "to ensure continuity".

When Broadcom's offer was first announced, Wall Street analysts mostly liked the deal although there was some skepticism that it would pass regulatory muster.

But Broadcom could still boost its offer before the March 6 annual meeting, making it more attractive to Qualcomm's shareholders.

Qualcomm's shareholders have indicated to Broadcom they expect at least $80 per share in order for Qualcomm to be sold.

Be that as it may, Broadcom's move sets the clock ticking on solving Qualcomm's problems. Shares were inactive in Monday's premarket session. Qualcomm stock was down 2.2%, near 64.05. NXP shares ended trading on Friday at $114.78.

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