Broadcom turns up pressure on Qualcomm for takeover bid

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SEC FORM 4 - SEC.gov

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 USA semiconductor firm. For its part, Qualcomm has already released a statement blasting Broadcom's attempt, calling Broadcom's nomination of board members "a blatant attempt to seize control of the Qualcomm Board in order to advance Broadcom's acquisition agenda".

Qualcomm last month rejected Broadcom's $103 billion cash-and-stock bid, saying it dramatically undervalued the company, a line it repeated in Monday's statement. Year to date, shares of Qualcomm have tacked on 0.4%, Broadcom has rallied 54% and the S&P 500 has climbed 18%.

"Qualcomm stockholders expect a board that will support this innovation while evaluating objectively the full range of opportunities available to maximise value for all Qualcomm stockholders".

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.

"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.

Broadcom's board nominees for Qualcomm comprises a slate of former chief execs and investment types, including Samih Elhage, the former prez of Nokia's mobile networks division, and Gregorio Reyes, one-time chairman of the board of Dialog Semiconductor plc, which is another Apple supplier. Broadcom also hasn't committed to a financing plan, while the company's move from Asia to the USA remains uncertain, according to Qualcomm.

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. The company added that its stockholders are poised to participate in substantial growth and value creation as the company continues to execute its strategy across its businesses. The offered amount was 33 percent higher than Qualcomm's 30-day average share price at the time.

Broadcom Limited (NASDAQ AVGO) opened at $271.56 on Friday. If it does sell to Broadcom, it means the combined businesses' chips will be present in more than a billion smartphones sold every year.

In its own statement, Broadcom said its proposal represented a 28 percent premium over the closing price of Qualcomm's common stock on November 2.

"We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us", said Hock Tan, President and CEO of Broadcom. "We would not make this offer if we were not confident that our common global customers would embrace the proposed combination".

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