Broadcom’s Qualcomm bid takes another twist

2nd March 2018
Joe Bush

The saga surrounding Broadcom’s proposed bid for Qualcomm has ramped up over the last few days in the build up to 6th March Qualcomm 2018 Annual Meeting of Stockholders, where shareholders will decide whether to re-elect the current board or Broadcom’s slate of six nominees.

In a recent statement on its website, Philippines-based Broadcom has urged Qualcomm stockholders to vote ‘for’ all six Broadcom nominees in connection with the meeting, stating that ‘it is extremely important that stockholders vote as soon as possible – no matter how many shares they own – to support Broadcom's compelling proposal.’

Broadcom issued the following statement: ‘Broadcom strongly urges Qualcomm stockholders to vote ‘for’ all six of Broadcom's independent director nominees to demonstrate support for Broadcom's value-enhancing offer to acquire Qualcomm. Rather than acting as true fiduciaries with a responsibility to act in the best interests of Qualcomm's stockholders, the Qualcomm board has done nothing more than feign engagement with Broadcom.’

Broadcom claims that its offer provides greater value and certainty to Qualcomm stockholders, with less risk than any other available alternative. Not also added that Qualcomm stockholders ‘deserve directors who are willing to genuinely consider all paths to maximising stockholder value, including by sincerely engaging with Broadcom to negotiate a transaction. Broadcom's six independent director nominees are highly qualified, and unlike the current Qualcomm board, will work in earnest to maximize stockholder value.’

In response however, Qualcomm Incorporated has responded by labelling Broadcom’s comments as misleading.

A company statement from Qualcomm released on 27th February read: ‘The latest statement issued by Broadcom is disingenuous and clearly intended to create a false impression about Qualcomm’s level of engagement. In fact, Qualcomm has repeatedly attempted to engage with Broadcom on issues including price, including at meetings on 14th February and 23rd February. In each of those meetings, Broadcom has refused to engage on price.

‘Earlier today, Qualcomm made a comprehensive proposal that addresses regulatory and other merger agreement issues in order to clear the way for a price discussion with Broadcom. The ball is in Broadcom’s court to let us know whether it is willing to engage with us. Qualcomm’s Board remains unanimous in its view that Broadcom’s current offer of $79.00 per share, as well as the previous offer of $82.00 per share, materially undervalues the company.

‘Broadcom’s statements about Qualcomm considering moving the date of its annual meeting are false. Qualcomm has no intention of delaying the annual meeting and made that clear to Broadcom during our 23rd February meeting.’

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