Bruising Qualcomm-Broadcom battle heads for showdown
SAN FRANCISCO With a potential for the biggest-ever deal in the tech sector at stake, Qualcomm shareholders will have their say on a hostile bid for the US mobile chip giant by Singapore-based rival Broadcom.
Qualcomm shareholders at an annual gathering tomorrow will get to vote whether to replace six of the California company's 11 board members with candidates backed by Broadcom, essentially endorsing the deal estimated to be worth US$117 billion (S$154 billion).
After weeks of tactical public statements, the companies' boards remain at odds over the unsolicited offer.
Qualcomm's board on Thursday sent a letter to shareholders urging them to re-elect its current members, making a statement against Broadcom's offer.
"The Qualcomm board believes it is not in the best interest of Qualcomm's stockholders to elect Broadcom's nominees," it said.
Qualcomm, the dominant maker of microprocessors for smartphones, says it has a bright future on its own, ahead of a transition to fifth-generation (5G) wireless communications networks.
Broadcom meanwhile fired off a letter of its own, urging Qualcomm shareholders to elect all six of its nominees to the board, sending "a clear signal" supporting the takeover bid which would provide a handsome gain to shareholders of the US firm.
The hostile offer "provides greater value and certainty to Qualcomm stockholders, with less risk, than any other available alternative", Broadcom told shareholders.
But the Broadcom offer "undervalues" the US firm, Qualcomm has said, while opening the door to talks if Broadcom boosts its price.
Broadcom made its first offer in November, days after chief executive Hock Tan visited the White House.
Any tie-up of the two giants could reshape the sector of chips for smartphones and connected devices. But it would have to pass regulatory muster in several countries. - AFP