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Broadcom’s bid for Qualcomm grows hostile as takeover fight escalates

By in Press Enterprise on December 4, 2017

By The New York Times

Broadcom on Monday proposed a slate of 11 directors to replace the entire board of Qualcomm, setting the stage for a proxy battle over the fate of its unsolicited $105 billion bid for the world’s largest maker of smartphone chips.

The proposal was widely seen as a tactic to pressure Qualcomm to negotiate what would be the largest technology deal in history. Last month, Qualcomm said its directors had unanimously rejected the bid, leaving Broadcom with the option to take the issue to shareholders by proposing a board slate who would back it. Qualcomm would most likely vigorously oppose Broadcom’s nominees.

Broadcom’s gambit adds a new dimension to a struggle with immensely high stakes. If completed, a combination of Broadcom and Qualcomm would top the $67 billion price tag that Dell paid for the data storage specialist EMC in 2016.

Broadcom announced its $70-a-share bid Nov. 6, but Qualcomm said that the offer dramatically undervalued the company. Qualcomm argued that its existing ownership and management would provide a greater long-term return to shareholders, in part because of its strong position in technologies such as the coming generation of 5G cellular communications.

Qualcomm is expected to use similar arguments to try to convince shareholders to favor incumbent board members and reject Broadcom’s nominees. The company has set March 6 for an annual shareholders meeting, which will include the election of directors. Proxy materials associated with the rival slates of candidates will most likely be distributed in January.

“We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities,” Broadcom’s chief executive, Hock Tan, said in a statement.

“The nominations give Qualcomm stockholders an opportunity to voice their disappointment with Qualcomm’s directors and their refusal to engage in discussions with us.”

Qualcomm fired back after Broadcom’s announcement, criticizing […]    

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