Broadcom has announced that it will seek to elect a majority of just six members to Qualcomm’s board of directors at the latter’s annual shareholder meeting on March 6.
This follows Broadcom’s original declaration from early December when it revealed it was looking to replace all 11 Qualcomm board members with its own candidates.
By way of a quick recap, Broadcom has been trying to acquire its chip maker rival since November, though Qualcomm rejected the original $103 billion offer. Things went hostile in December, when Broadcom revealed it would head straight to Qualcomm’s shareholders and ask them to elect an entire slate of new directors chosen by Broadcom. Last week, Broadcom submitted a revised $121 billion bid — consisting of cash and stock — to try to push the deal through. However, Qualcomm once again rejected the deal, arguing that the figure significantly undervalues the company and that the deal would likely face significant regulatory hurdles anyway.
Yesterday, Broadcom revealed it had all the funding in place via a gargantuan credit facility spanning multiple financiers, and rumors abound that the two companies are scheduled to meet this week to discuss the proposed transaction.
By lowering its proposed nominees from 11 to six members, Broadcom is still pushing for a majority presence on the Qualcomm board, but it will now be able to claim a more balanced approach to pushing the merger through, one that benefits from “continuity” and a more seamless transition.
“Qualcomm stockholders have consistently communicated to us their support for our $82 per share cash and stock offer,” noted Broadcom president and CEO Hock Tan, in a press release. “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.”
Broadcom has stressed that its $82/share offer will be withdrawn unless its proposed nominees are accepted at the March meeting or Qualcomm agrees to its offer.