Broadcom proposes 11 new directors for Qualcomm’s board, initiating what looks like a hostile takeover

Qualcomm has maintained its independence, as well as its rejection of Broadcom’s initial bid

The thing about hostile takeovers is that you don’t really know that one has happened, until it happens.

American chip manufacturer Broadcom, however, is not hiding its open desire to usurp control of Qualcomm.

In a December 4th, 2017 media release, Broadcom announced plans to nominate 11 new directors at Qualcomm’s 2018 annual meeting, in a remarkably public attempt to seize control of the company whose semiconductor chips power the majority of Android devices — not to mention a sizeable portion of Apple’s iPhones and iPads.

In response, Qualcomm issued its own statement, stating that it believes “that this action is a blatant attempt to seize control of the Qualcomm board in order to advance Broadcom’s acquisition agenda.”

“No company in this industry is better position 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 December 4th, 2017 media release. “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.”

Broadcom’s nomination list is comprised of nine men and two women. Among these 11 individuals are former executives from Nokia, General Motors and Seagate.

Broadcom initiated acquisition proceedings on November 6th, 2017, with an offer of $103 billion USD. Qualcomm unanimously rejected this bid, with later speculation suggesting that the company was holding out for more money.

Broadcom’s president and CEO Hock Tan seemed to speak to this speculation in his company’s December 4th media release.

“We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us,” said Tan.

However, Tan’s quote also fails to hide Broadcom’s clear desire to seize control of Qualcomm by any legal means necessary — including giving Qualcomm stockholders the chance to see what the company would look like under Broadcom’s control.

“The nominations give Qualcomm stockholders an opportunity to voice their disappointment with Qualcomm’s directors and their refusal to engage in discussions with us,” said Tan. “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.”

Source: Broadcom, Qualcomm