An extraordinary move by giant chip maker Broadcom to take control of San Diego based Qualcomm.
In a story first reported in the New York Times, Broadcom officially announced a hostile takeover bid for Qualcomm Monday.The move sets the stage for a proxy battle over Broadcom’s$105 billion bid for largest maker of smartphone chips.
Broadcom has nominated 11 alternative candidates to takeover Qualcomm’s board of directors. Shareholders will likely decide the fate of the candidates and be announced in March.
Hock Tan, Broadcom’s chief executive said, “We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities. The nominations give Qualcomm stockholders an opportunity to voice their disappointment with Qualcomm’s directors and their refusal to engage in discussions with us.”
Business analysts are describing the move as a tactic to pressure Qualcomm to negotiate the largest technology deal in history.
Last month, Qualcomm rejected Broadcom’s bid with the option to take the issue to shareholders by proposing a board slate who would back it.
Qualcomm is one of only two Fortune 500 firms headquartered in San Diego.
Broadcom did not raise the $70 per share offer price on Monday — which valued Qualcomm at $103 billion.