Qualcomm defended the competency of its “world-class” board of directors on Friday, stating that all of its members are highly capable of leading the company going forward and dismissing any talks of nominating potential replacements during re-election scheduled during an annual shareholder meeting in March. The move was made in response to Broadcom’s nominations of alternative directors from earlier this month, with the international semiconductor company naming replacements that would be prepared to vote for selling the firm. The list of nominees was compiled by Broadcom and its investor Silver Lake Partners, ultimately prompting the San Diego, California-based tech giant to file a preliminary proxy statement detailing the circumstances of the upcoming shareholder meeting to the United States Securities and Exchange Commission.
Besides concluding Broadcom’s candidates are “inherently conflicted” and wouldn’t ennoble its existing roster of directors, Qualcomm said its current board already proved its worth by leading the company to major growth in numerous segments, from mobile chips and automotive technologies to networking and the Internet of Things. The firm reiterated that selling itself to Broadcom wouldn’t be beneficial in the long run and that its existing management and structure are all entirely committed to maximizing shareholder value while maintaining the existing growth momentum. The main point of contention in the affair is Broadcom’s valuation of Qualcomm given as part of its unsolicited acquisition bid in early November, with the propositioned party claiming the $130 billion offer that includes $25 billion of net debt severely undervalues the company. While some minor investors already signaled they’d be prepared to haggle with Broadcom, its chances of gaining control of Qualcomm as part of a hostile takeover attempt remain unclear.
Besides labeling the bid as too low, Qualcomm said Broadcom’s approach comes with massive regulatory concerns, suggesting the deal would hardly survive international antitrust scrutiny. Qualcomm’s next annual shareholder meeting is set to take place on March 6th when its shareholders will be encouraged to vote for re-electing its current board of directors but will also be able to go with Broadcom’s picks. Broadcom’s original bid includes $60 in cash and $10 in shares of the combined entity. The high-profile proxy takeover war is expected to heat up in the weeks leading up to the March meeting as Broadcom is expected to do everything it can to convince Qualcomm’s shareholder into voting for its candidates and directly supporting the proposed merger.
Qualcomm's Preliminary Proxy Statement