Qualcomm Monday denounced a plan by Broadcom to replace the San Diego-based mobile technology company's board of directors as part of what is now a hostile takeover bid.
Qualcomm's board rejected a $70-per-share buyout from Singapore-based chipmaker Broadcom last month. Broadcom responded with a list of nine men and two women it wants to seat on Qualcomm's board.
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Shareholders will be asked to vote on the competing slates of candidates, with results to be announced at a shareholders meeting scheduled for March 6.
A statement from Qualcomm called the action "a blatant attempt to seize control of the Qualcomm board in order to advance Broadcom's acquisition agenda." Broadcom's nominees "are inherently conflicted" given the buyout plans, according to Qualcomm.
"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. "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."
The Qualcomm statement said a merger would take well over a year to complete given the regulatory issues involved. Broadcom also hasn't committed to a financing plan, while the company's move from Asia to the U.S. remains uncertain, according to Qualcomm.
The board said the November offer of $60 per share in cash plus $10 of Broadcom stock undervalued Qualcomm.
In its own statement, Broadcom said its proposal represented a 28 percent premium over the closing price of Qualcomm's common stock on Nov. 2.
"We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us," said Hock Tan, Broadcom's president and CEO.
"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. "Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm."
He said Broadcom representatives have been repeatedly rebuffed in their attempts to engage Qualcomm officials.
