Qualcomm confirms receiving Broadcom's board nominees

Qualcomm confirms receiving Broadcom's board nominees

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. Since Qualcomm's board of directors rejected the takeover proposal, the company is now attempting to take the issue directly to Qualcomm's shareholders. Gofen & Glossberg LLC IL lifted its holdings in shares of Broadcom by 1.5% during the 3rd quarter.

Key quote from the press release: "Qualcomm believes that this action is a blatant attempt to seize control of the Qualcomm Board in order to advance Broadcom's acquisition agenda". According to the report Broadcom is set to unveil nominees whom Qualcomm shareholders can vote on to replace the USA semiconductor company's board of directors, according to people familiar with the matter.

Broadcom says its buyout bid for Qualcomm stands whether the NXP acquisition is completed or not. Broadcom's nominees "are inherently conflicted" given the buyout plans, according to Qualcomm.

Broadcom's $103 billion bid for fellow chipmaker Qualcomm is not only unsolicited, it is now hostile. The company came to the conclusion that the proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty, and therefore is not in the best interests of Qualcomm stockholders. It wasn't enough to impress the board members at Qualcomm, who said it undervalued the company.

Tom Horton, Qualcomm's presiding director, said no company is better positioned than Qualcomm to bring mobile technologies to these industries. Qualcomm stockholders are poised to participate in substantial growth and value creation as the Company continues to execute its strategy across its businesses.

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Broadcom has offered to pay $105 billion for Qualcomm, potentially creating the world's biggest chip supplier in one transaction. It's current board remain optimistic about the company future and offering better returns to shareholders in the future.

"The combination of the two companies could generate strong synergies and create a dominant wireless business and overall powerful global semiconductor leader", said Mike Walkley, an analyst at Canaccord Genuity told Bloomberg, which broke the story.

In its own statement, Broadcom said its proposal represented a 28 percent premium over the closing price of Qualcomm's common stock on November 2. However, according to sources it's likely to reject the offer according to sources, as it doesn't feel it's representative of the value of the company or the people in it.

"The nominations give Qualcomm stockholders an opportunity to express their disappointment with Qualcomm's directors and their refusal to engage in discussions with us", said Tan in a statement.