According to the report Broadcom is set to unveil nominees whom Qualcomm shareholders can vote on to replace the US semiconductor company's board of directors, according to people familiar with the matter.
Qualcomm responded to the offer today by saying Broadcom's action was "a blatant attempt to seize control of the Qualcomm Board in order to advance Broadcom's acquisition agenda".
Qualcomm's leadership believes that Broadcom's offer "dramatically undervalues" them. Ingalls & Snyder LLC now owns 1,331 shares of the semiconductor manufacturer's stock worth $310,000 after purchasing an additional 105 shares during the last quarter. If the results do not allow Broadcom to unseat Qualcomm's Board of Directors, we could see a new bid announced, high enough to get the majority of stockholders to tender their shares to Broadcom.
"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". Moreover, the company stated that it would support expanding the 11-person board to make room for three current directors if the replacement proposal is accepted.
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.More news: Deutsche Bank gets subpoena from Mueller on Trump accounts
Tan said Broadcom had received "positive feedback from customers" about the proposed merger and was confident that regulatory requirements could be made.
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. If Broadcom's group is voted in, it would have to continue overseeing Qualcomm until the deal could be closed.
Broadcom's $103 billion bid for fellow chipmaker Qualcomm is not only unsolicited, it is now hostile. In addition, Qualcomm is continuing its development of its mobile chips and transition into 5G networks. 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 note on Monday.
Qualcomm, meanwhile, issued its own press release where it acknowledged Broadcom's proposal. However, according to sources it's likely to reject the offer according to sources, as it doesn't feel it's representative of the value of the company or the people in it.
Hock Tan, President and Chief Executive Officer of Broadcom, stated, "We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us".