Broadcom Takes First Step Toward a Hostile Takeover of Qualcomm

Broadcom Takes First Step Toward a Hostile Takeover of Qualcomm

Qualcomm said that it believes that the latest action by Broadcom is a blatant attempt to seize control of the company's board in order to advance Broadcom's acquisition agenda. Broadcom's nominees "are inherently conflicted" given the buyout plans, according to Qualcomm. Quantitative Systematic Strategies LLC now owns 4,335 shares of the semiconductor manufacturer's stock worth $1,051,000 after purchasing an additional 3,368 shares during the last quarter.

Qualcomm is outraged - outraged, we tell you - by Broadcom's cheeky efforts to take over its board at the company's upcoming AGM.

"Qualcomm's stockholders expect a board that will support this innovation while evaluating objectively the full range of opportunities available to maximize value for all Qualcomm stockholders", said Horton in a statement.

Nevertheless, Qualcomm's board unanimously rejected the offer on November 13, saying it "significantly undervalued" the company.

Qualcomm's entire Board of Directors is now up for re-election, something that Broadcom is attempting to take advantage of in order to force through its desired acquisition, having had a $103bn takeover bid rejected by Qualcomm less than a month ago. It added that Broadcom and Silver Lake, the private equity fund backing it, are demanding the company decides now who should join its board of directors, despite the fact that if any deal were to happen, the changes wouldn't happen for at least 12 months while any takeover bid closes.

The company also highlighted a potentially lengthy antitrust review, Broadcom's pending relocation from Singapore to DE and "Broadcom's lack of committed financing".

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Broadcom's $103 billion bid for fellow chipmaker Qualcomm is not only unsolicited, it is now hostile.

Qualcomm provides chips to carrier networks to deliver broadband and mobile data, and is now working on chips for mobile and transition to 5G networks. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G". Alps Advisors Inc. acquired a new position in shares of Broadcom in the 2nd quarter worth approximately $221,000.

On November 6, Broadcom submitted a $130 billion offer, including $25 billion of debt (the largest in tech history if completed), to acquire 100 percent of Qualcomm, including Qualcomm's pending acquisition of NXP Semiconductors.

Broadcom (NASDAQ:AVGO)'s stock had its "buy" rating reissued by investment analysts at Raymond James Financial in a note issued to investors on Monday.

Broadcom chief executive Hock Tan said in a statement that "it remains our strong preference to engage in a constructive dialogue with Qualcomm".

Qualcomm, meanwhile, issued its own press release where it acknowledged Broadcom's proposal.