Chipmaker Broadcom Ltd made its first formal move toward a hostile bid to take over Qualcomm Inc on Monday, laying out a slate of 11 nominees it wants to put on the board of the US semiconductor firm. The recruitment pool, which includes a former president of Nokia's the Mobile Networks group and a former director and chairman of the board of Dialog Semiconductor, would oversee Qualcomm's day-to-day operations until a deal with Broadcom closed.
Broadcom countered in a statement Monday, saying that while some Qualcomm board members felt its bid undervalued the company, they've heard from a lot of shareholders who say they are interested in the acquisition. 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 interest of Qualcomm stockholders".
Qualcomm also highlights that Broadcom has not yet shown any adequate solutions to any regulatory issues that may come up, and that Broadcom has neither committed financing nor completed its transition from Singapore to the United States as additional concerns about the take over.
Qualcomm said Monday that the Broadcom offer undervalues Qualcomm's growth prospects in the Internet of Things, 5G, automotive and data center networking markets. Reuters reported last month that Broadcom was considering raising its offer by offering more of its own stock.
Adding further fuel to the takeover fire, Broadcom CEO Hock Tan said he's engaging directly with Qualcomm shareholders and customers.