Before taking this radical decision, the board asked Jacobs to step down since he won't be able to do his duties as director and work on a bid for the company at the same time.
Dr. Jacobs has been with Qualcomm since 1990, rising to the level of Chief Executive Officer and Chairman of the Board. The board largely agreed with Jacobs that Broadcom's bid was too low. Before the contract was scuttled, the attempt of Broadcom to replace numerous chipmaker's directors was on course to succeed, pointing loss of investor support for numerous board members of Qualcomm, consisting Steve Mollenkopf, the Chief Executive Officer along with Jacobs, who was later on demoted to a director. U.S. President Donald Trump blocked the deal earlier this week.
The company did not give specific reasons for the decision but said it wanted to stay independent and continue with its business plans. Apparently, Jacobs was pretty vocal at the meeting and reiterated his wish to pursue a potential buyout after making the same proposition in a letter to the board on Tuesday. Qualcomm has extended the acceptance deadline for its offer several times in recent months.
He later passed the baton to his son, Paul Jacobs.
"I am glad the board is willing to evaluate such a proposal", he added in a statement. Jacobs didn't immediately respond to a request for comment. Any deal is at the exploratory stage and no financial commitments have been made, the person also noted.
In a statement, Broadcom said that is would comply with the order from the US Government. Paul Jacobs holds about 1.3 million shares of Qualcomm, less than 0.1 percent of outstanding shares, according to Qualcomm's security filings. For a person, raising the tens of billions of dollars needed to start a leveraged buyout of more than 120 billion dollars would be unprecedented, especially if he was restricted to the USA funding sources.
There's at least one example of a tech founder using a buyout to keep control of their company: In 2013, Michael Dell took the eponymous computer maker private in a $24.9 billion deal. Krause said he was "touched" by an Institutional Shareholder Services report on Wednesday encouraging Qualcomm shareholders to cast protest ballots for Broadcom's director nominees.