Broadcom reached out to Qualcomm investors directly as part of a charm offensive designed to reignite a proposed takeover of the US chip giant, after its initial advances were rebuffed.
In a letter, Broadcom urged Qualcomm stockholders to vote in favour of the appointment of a new board, which it said would support takeover negotiations.
Broadcom launched a $130 billion takeover for Qualcomm in November 2017, which was swiftly rejected by Qualcomm’s board because the offer was deemed to “dramatically undervalue” the company. Broadcom then put forward 11 executives to replace the current Qualcomm board, arguing Qualcomm shareholders were open to a deal as the proposed takeover turned hostile.
Qualcomm’s board unanimously rejected the move and instead nominated its own 11 directors for re-election at the 2018 annual general meeting, which will be held on 6 March.
In Broadcom’s latest move, CEO Hock Tan said by voting for “11 independent director nominees, Qualcomm stockholders can send a clear message to the Qualcomm board that they should immediately engage in constructive discussions with us regarding our premium offer”.
Broadcom also reiterated the expected benefits from the tie-up, stating it had a clear roadmap for the combined company: “With enhanced scale, R&D resources, product diversification and financial flexibility, the combined company will be positioned to accelerate innovation and deliver the most advanced semiconductor solutions to customers around the world,” added Tan.
The proposal, which is valued at $70 per share – consisting of $60 in cash and $10 of Broadcom stock, stands regardless of Qualcomm’s own proposed acquisition of NXP semiconductors, added Broadcom.