In what appears to be turning into an increasingly hostile takeover, Broadcom is turning up the pressure on its $130bn bid to purchase competitor Qualcomm by directly addressing the latter company's shareholders.
The move was announced by Broadcom, a semiconductor company specialising in the wireless and broadband industry, in a press statement.
According to the statement, Broadcom revealed its plan to nominate a slate of 11 directors that would replace the entire board at Qualcomm.
Broadcom president and CEO Hock Tan highlighted the company's increasing desire to purchase its rival and also noted Qualcomm's insistence of rejecting its approaches.
"We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us. We also continue to receive positive feedback from customers and, having had initial meetings with certain relevant antitrust authorities, we remain confident that any regulatory requirements necessary to complete a combination will be met in a timely manner," Tan said.
Hock added that: "Although we are taking this step, it remains our strong preference to engage in a constructive dialogue with Qualcomm. We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities."
Qualcomm, meanwhile, issued its own press release where it acknowledged Broadcom's proposal. However, the company was firm in dismissing the suggestion to replace its board.
"Broadcom and Silver Lake are effectively asking stockholders to foreclose options and make a decision now on a non-binding proposed transaction which could not be completed for well over a year, if ever, given the magnitude of regulatory issues, the absence of commitments by Broadcom to resolve those issues, Broadcom's lack of committed financing, and the uncertainty surrounding its transition from Singapore to the United States," the Qualcomm statement read in part.
"No company in the industry is better positioned than Qualcomm in mobile, IoT, automotive, edge computing and networking and to lead the transition to 5G," added Tom Horton, Qualcomm's presiding director. "Qualcomm stockholders expect a Board that will support this innovation while evaluating objectively the full range of opportunities available to maximise value for all Qualcomm stockholders."
Qualcomm believes the bid from Broadcom of $130bn "dramatically undervalues" the telecommunications equipment firm. The latter's board unanimously rejected the takeover bid last month.