Broadcom Not Giving Up on the Qualcomm Acquisition - Possible Hostile Takeover?

Broadcom QualcommOn November 6, 2017 Broadcom offered to buy out all outstanding shares of Qualcomm for $60 in cash and $10 in Broadcom Stock. Qualcomm branded this as an unsolicited offer and suggested that Qualcomm stock is worth much more. However, Broadcom is not giving up. Their CEO, Hock Tan said that they have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with Broadcom. They 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. They would prefer to engage in a constructive dialogue with Qualcomm. They have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities.

This week, Broadcom has notified Qualcomm of its intention to nominate a slate of 11 independent, highly qualified individuals for election to Qualcomm's Board of Directors and to propose certain other matters for the consideration of Qualcomm stockholders at Qualcomm's 2018 Annual Meeting of Stockholders. The nominations give Qualcomm stockholders an opportunity to voice their disappointment with Qualcomm's directors and their refusal to engage in discussions with us. In light of the significant value the Broadcom proposal provides for Qualcomm stockholders, they believe Qualcomm stockholders would be better served by new independent, highly qualified nominees who are committed to maximizing value and acting in the best interests of Qualcomm stockholders.

Broadcom's offer represented a 28% premium over the closing price of Qualcomm's common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33% to Qualcomm's unaffected 30-day volume-weighted average price. The Broadcom proposal stands whether Qualcomm's pending acquisition of NXP Semiconductors N.V. ("NXP") is consummated on the currently disclosed terms of $110 per NXP share or is terminated.

Broadcom intends to file with the Securities and Exchange Commission a proxy statement, accompanied by a BLUE proxy card, in connection with Qualcomm's 2018 Annual Meeting. Qualcomm has announced that its 2018 Annual Meeting will be held on March 6, 2018. 

To ensure continuity, Broadcom would support a decision by the 11 new directors, upon their election, to increase the size of the Board and reappoint Mark D. McLaughlin, Anthony J. "Tony" Vinciquerra and Jeffrey W. Henderson as directors.

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