Last month Qualcomm rejected a $70 per share acquisition offer from Broadcom — but the rival chipmaker isn’t stepping away. Today it’s announced it’s nominated a slate of eleven directors for Qualcomm’s board.
The move puts pressure on Qualcomm’s board to engage with Broadcom’s approach by paving the way for its own shareholders to vote for a takeover which the board already rebuffed.
Qualcomm is due to hold an annual meeting of stockholders on March 6, 2018.
Broadcom says its earlier acquisition offer represents a 28% premium over the closing price of Qualcomm’s common stock on November 2, 2017, aka the last unaffected trading day prior to media speculation regarding a potential transaction; and a premium of 33% to Qualcomm’s unaffected 30-day volume-weighted average price.
But Qualcomm’s board continue to argue the offer “dramatically” undervalues the company.
In a statement confirming receipt of a slate of candidates from Broadcom today, Qualcomm also played up regulatory uncertainty around the transaction, and urged shareholders to support the existing board of “world-class directors” — emphasizing that nine are independent and four have been added in the last three years.
It further described the move as “a blatant attempt to seize control of the Qualcomm Board in order to advance Broadcom’s acquisition agenda” — arguing that the nominees are “inherently conflicted given Broadcom’s desire to acquire Qualcomm in a manner that dramatically undervalues Qualcomm to Broadcom’s benefit”.
“No company in the industry is better positioned than Qualcomm in mobile, IoT, automotive, edge computing and networking and to lead the transition to 5G,” said Tom Horton, Qualcomm’s presiding director, in a statement. “Qualcomm stockholders expect a Board that will support this innovation while evaluating objectively the full range of opportunities available to maximize value for all Qualcomm stockholders.”
In its own statement, Broadcom’s Hock Tan, president and CEO, said the company’s “strong preference” is to engage in what he described as “a constructive dialogue with Qualcomm”. But he also reiterated that the rival has entirely rebuffed its approach thus far.
“We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities. The nominations give Qualcomm stockholders an opportunity to voice their disappointment with Qualcomm’s directors and their refusal to engage in discussions with us,” he said.
“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.”
The full list of Broadcom’s nominees can be found here.
If the nominees are elected, Broadcom added that it would support a decision by them to increase the size of the Qualcomm Board and reappoint Mark D. McLaughlin, Anthony J. “Tony” Vinciquerra and Jeffrey W. Henderson as directors.