Broadcom proposes replacing Qualcomm's board in pursuit of $105 billion takeover

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Key quote from the press release: "Qualcomm believes that this action is a blatant attempt to seize control of the Qualcomm Board in order to advance Broadcom's acquisition agenda". Qualcomm's board said that Broadcom's proposal significantly undervalues Qualcomm given its leadership position in mobile technology and their future growth opportunity.

Broadcom offered to buy Qualcomm last month in a massive deal that would potentially create a semiconductor, industrial internet and 5G juggernaut. Oppenheimer raised their price target on shares of Broadcom from $275.00 to $300.00 and gave the stock an "outperform" rating in a research report on Monday. "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". It wasn't enough to impress the board members at Qualcomm, who said it undervalued the company.

Qualcomm noted that its 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. Broadcom said the proxy battle comes after Qualcomm has "ignored" repeated attempts to discuss its buyout bid, which would value Qualcomm at almost $105 billion, and was rejected by Qualcomm last month. "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".

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.

While Qualcomm has blasted Broadcom for this attempt, they also state that the company has yet to offer any appropriate solutions to regulatory hurdles that may come up.

Broadcom's $103 billion bid for fellow chipmaker Qualcomm is not only unsolicited, it is now hostile. The offered amount was 33 percent higher than Qualcomm's 30-day average share price at the time.

Although Qualcomm isn't as large as Samsung or Intel as it stands, the purchase of the firm by chip maker Broadcom could change this, completely shaking up the tech industry. The proposed transaction was valued at approximately $130 billion.

If Broadcom decides to raise its bid before March, it could help the company win over Qualcomm's stockholders very quickly.

"Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm", Broadcom CEO Hock Tan said in a statement.

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