Broadcom takes aim at Qualcomm board
Chipmaker’s CEO says he would rather negotiate a truce with the takeover target than see the fight over the company’s future go to shareholders
SAN JOSE >> Chipmaker Broadcom ratcheted up the pressure Monday on Qualcomm in the biggestever takeover bid for a technology company, saying it will nominate a new slate of board directors for Qualcomm at that company’s annual meeting in March.
Broadcom Chief Executive Hock Tan said in a statement that his company would nominate 11 new directors to “give Qualcomm stockholders an opportunity to voice their disappointment with Qualcomm’s directors and their refusal to engage in discussions with us.”
Broadcom made an unsolicited bid for Qualcomm on Nov. 6 that valued the San Diegobased company at $70 a share, or $103 billion, making it the largestever proposed acquisition in the tech industry. The deal is potentially worth up to $130 billion if Qualcomm’s debt is taken into consideration.
Qualcomm quickly rebuffed Broadcom’s offer as undervaluing the company.
But Broadcom’s announcement Monday sets up a potential proxy fight at Qualcomm’s next shareholders’ meeting, slated for March 6.
Broadcom’s proposed slate of Qualcomm directors is heavy with experience in the networking, communications and semiconductor industries. Nominees include Samih Elhage, former president of the mobile networks business group of Nokia; Gregorio Reyes, a former executive with National Semiconductor, Motorola, Fairchild Semiconductor and Eaton, and a former director at Seagate; and David Golden, managing partner at Revolution Ventures.
Broadcom said that to “ensure continuity,” if Qualcomm shareholders approve Broadcom’s board nominees, it would support expanding Qualcomm’s board to 14 members to include current Qualcomm directors Mark McLaughlin, Anthony Vinciquerra and Jeffrey Henderson.
Tan said he would rather see Qualcomm negotiate a truce and accept Broadcom’s offer, instead of having to take the fight over Qualcomm’s future to its shareholders.
“Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm,” Tan said.
Qualcomm responded in a statement that it stands behind its board of directors, which includes Chief Executive Steve Mollenkopf; former CEO and current Chairman Paul Jacobs; and former long-time HP executive Ann Livermore. Qualcomm called Broadcom’s action on Monday a “blatant attempt” to gain control of the company.
“These nominees are inherently conflicted given Broadcom’s desire to acquire Qualcomm in a manner that dramatically undervalues Qualcomm to Broadcom’s benefit,” Qualcomm said.