Broadcom is turning up the heat on its unsolicited $130 billion bid to buy Qualcomm. On Monday, the wireless and broadband player submitted a proposal to nominate a slate of 11 independent directors to replace Qualcomm's entire current board, setting the stage for a proxy fight over control of the global chip giant.
Broadcom offered to buy Qualcomm last month in a massive deal that would potentially create a semiconductor, industrial internet and 5G juggernaut.
The deal was quickly shut down in a unanimous decision by Qualcomm's board, which said the deal undervalued Qualcomm and its future prospects. Qualcomm also argued that the deal would bring "significant regulatory uncertainty" which could have led to outright regulatory rejection, complicated discussions, and a long road to meet legal requirements and maintain value.
However, Broadcom chief executive Hock Tan said that Qualcomm shareholders have approached Broadcom and expressed interest in the acquisition offer. Broadcom is now trying to force Qualcomm to the bargaining table by engaging directly with its shareholders and proposing a board that supports the deal.
"Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm," Tan said in a statement.
"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 a press release, Broadcom noted that it would support a decision by the proposed 11 new directors to increase the size of Qualcomm's board and reappoint three current directors "to ensure continuity." Qualcomm, meanwhile, is expected to rigorously oppose the proposed board upheaval.
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