Broadcom Ltd said on Monday it planned to nominate a slate of 11 independent members to the board of U.S. semiconductor firm Qualcomm Inc.
Broadcom's move comes after Qualcomm rejected its $103 billion cash-and-stock bid last month. Last month, Qualcomm said its directors had unanimously rejected the bid.
Broadcom has notified Qualcomm of its intention to nominate the new members for Qualcomm's board, and to propose certain other matters for the consideration of Qualcomm stockholders.
Broadcom intends to file with the Securities and Exchange Commission a proxy statement, accompanied by a BLUE proxy card, in connection with Qualcomm's 2018 Annual Meeting. Qualcomm has announced that its 2018 Annual Meeting will be held on March 6, 2018.
Hock Tan, President and Chief Executive Officer of Broadcom, stated, "We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us. We also continue to receive positive feedback from customers and, having had initial meetings with certain relevant antitrust authorities, remain confident that any regulatory requirements necessary to complete a combination will be met in a timely manner. Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm. 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 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 interests of Qualcomm stockholders."
"Broadcom and Silver Lake are effectively asking stockholders to foreclose options and make a decision now on a non-binding proposed transaction which could not be completed for well over a year, if ever, given the magnitude of regulatory issues, the absence of commitments by Broadcom to resolve those issues, Broadcom's lack of committed financing, and the uncertainty surrounding its transition from Singapore to the United States." Qualcmomm said.
"Qualcomm's Board is composed of 11 world-class directors, 9 of whom are independent and 4 of whom have been added in the last 3 years, and all of whom are firmly committed to acting in the best interests of all Qualcomm stockholders. Qualcomm believes that this action is a blatant attempt to seize control of the Qualcomm Board in order to advance Broadcom's acquisition agenda. These nominees are inherently conflicted given Broadcom's desire to acquire Qualcomm in a manner that dramatically undervalues Qualcomm to Broadcom's benefit," the company added.
"No company in the industry is better positioned than Qualcomm in mobile, IoT, automotive, edge computing and networking and to lead the transition to 5G," said Tom Horton, Qualcomm's Presiding Director. "Qualcomm 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."