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Former Qualcomm chairman mounts a takeover bid

by on16 March 2018


Bit of long shot

After seeing off Broadcom, Qualcomm is now looking at another takeover bid by its former chairman Paul Jacobs

Jacobs has informed its board of directors that he will seek to partner with investment firms to make an offer for the US semiconductor company.

Qualcomm does not view Jacobs’ attempt to put together a buyout bid as credible, Jacobs has held talks with several investment firms, including SoftBank Group, Vision Fund, but has so far been unable to secure the necessary cash.

Money is somewhat important as Jacobs is attempting to put together the largest leveraged buyout of all time, three times as large as the $45 billion buyouts of Texas power utility Energy Future Holdings, which ended in bankruptcy.

SoftBank would give the move credibility but it would face conflicts given its ownership of British chip designer ARM. SoftBank’s deals are also subject to review by the Committee on Foreign Investment in the United States (CFIUS), the US national security panel that also objected to Broadcom’s bid for Qualcomm.

Jacobs, who still sits on Qualcomm’s board, was stripped of his title of executive chairman earlier this month when Jeffrey Henderson, another Qualcomm director, was named the non-executive chairman.

Jacobs agreed with Qualcomm’s board that Broadcom’s bid undervalued the company and was fraught with regulatory risks. However many on Qualcomm’s board blamed him for the dissatisfaction of some Qualcomm’s shareholders with the company’s handling of Broadcom’s bid.

Jacobs' dad co-founded Qualcomm, is up for re-election as a board director, alongside other Qualcomm nominees, at the company’s shareholder meeting on March 23. Proxy advisory firm ISS on Wednesday recommended to Qualcomm shareholders that they vote for Broadcom’s four nominees on Qualcomm’s 11-person board, even though their nominations have been withdrawn, as a form of protest.

 

Last modified on 16 March 2018
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