Broadcom almost halved the number of members it is seeking to elect to Qualcomm’s board, in a move designed to “ensure continuity” at the US chip giant ahead of a proposed takeover.
The company initially proposed to elect all 11 members to Qualcomm’s board after its initial takeover bid was rejected, but is now proposing six members instead. Broadcom added it would withdraw its final offer, made last week, unless it enters into a definitive agreement with Qualcomm following the conclusion of the company’s annual meeting, scheduled to be held on 6 March, or if the six nominees are elected.
Broadcom said it is still seeking to elect a majority of board members because it “is the only way for Qualcomm stockholders to obtain the benefit of Broadcom’s best and final offer for Qualcomm of $82 per share”.
“In addition, they have welcomed our willingness to provide for appropriate continuity on the Qualcomm board, and have also expressed a desire for a definitive mechanism of achieving such continuity. Reducing the number of nominees we are seeking to a simple majority provides precisely that mechanism,” said Broadcom president and CEO Hock Tan.
March meeting crucial
Qualcomm’s board of directors rejected Broadcom’s improved takeover offer, stating it undervalued the company.
As part of the latest bid, Broadcom also offered an $8 billion breakup fee should the deal be blocked by antitrust regulators, but Qualcomm said this did not go far enough to addressing its concerns.
However, Broadcom since reiterated its confidence Qualcomm shareholders can push the proposed takeover, with much appearing to hinge on the Annual General Meeting in March.
The move to scale back its nominations also comes ahead of a crunch meeting between the two companies, scheduled for today (14 February) to discuss the proposed takeover face-to-face.