Broadcom AVGO 630,12 +19,96 +3,27% is seeking to change Qualcomm‘s QCOM 108,78 +2,20 +2,06% mind on the unsolicited merger announced recently. Qualcomm rejected the bid, and now Broadcom’s next step is seen. (Broadcom to Nominate Slate of 11 Independent, Highly Qualified Directors for Election at Qualcomm’s 2018 Annual Meeting)
Broadcom is proposing 11 new board members to Qualcomm’s board at the Annual Meeting in 2018. These, of course, are likely to look more favourably on a deal with Broadcom than the current board members. Broadcom also confirmed that the deal is not contingent on the NXP purchase by Qualcomm closing. The 11 new directors listed in the press release have impressive industry credentials. Once elected, the directors will increase the size of the board and re-appoint Mark D. McLaughlin, Anthony J. “Tony” Vinciquerra and Jeffrey W. Henderson. These three have been linked with Jana Partners, an activist hedge fund that has looked to restructure Qualcomm in the past. Failure to achieve this led Jana to sell the majority of their Qualcomm shares at the beginning of 2016.
“We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us. 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. Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm. 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. 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.” – Hock Tan, CEO, Broadcom