A USA national security panel on Sunday ordered Qualcomm Inc to put off its March 6 annual shareholder meeting by a month, delaying a long awaited showdown in the company's attempt to fend off a takeover by Singapore-based Broadcom Ltd.
Shareholders were due to meet on Tuesday to vote on proposals to kick out the majority of Qualcomm's directors and appoint those nominated by Broadcom, paving the way for the new board to recommend the sale.
"This was a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom's independent director nominees".
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Broadcom said it was notified on Sunday night that Qualcomm had secretly filed a voluntary request with CFIUS on January 29 to initiate an investigation into its possible takeover by a foreign company. But deals involving foreign companies, especially those of sensitive USA technology like semiconductors, have increasingly been in the spotlight. On both occasions, Qualcomm declined, which led to Broadcom announcing a hostile takeover strategy, which hinges on swaying shareholders at Qualcomm's next shareholder meeting.
See stocks near a buy point, get chart pattern recognition and run custom screens. Broadcom has accused Qualcomm of failing to negotiate seriously, saying they were involved in "engagement theater". The takeover was to have come at a meeting scheduled for tomorrow, March 6.
Once Broadcom re-domiciles " now planned for no later than May 6 " the takeover would not be a CFIUS covered transaction, Broadcom said in the statement.
The government committee, which reviews foreign acquisitions of US assets with an eye toward national-security interests, is led by the Treasury Department and includes officials from the departments of Justice, Defense, Homeland Security and Energy.
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He was on the National Security Council from 2001 to 2003 during the administration of former President George W. News and others reported the story on Thursday, citing multiple sources.
U.S. Sen. John Cornyn, a Texas Republican, as well as San Diego-area Congressmen Scott Peters, a Democrat, and Duncan Hunter, a Republican, sent letters to Trump Administration officials requesting a CFIUS review.
Qualcomm went on to challenge an assertion that wasn't exactly what Broadcom had asserted.
"It is my view that failure by CFIUS to review this hostile takeover would potentially encourage other foreign parties to evade CFIUS review by taking control of the boards of sensitive USA businesses through proxy fights", Texas Republican Sen. Qualcomm is one of the few major corporations with a global reach to be headquartered in a city known mainly for tourism, and smaller defense and life-sciences firms.
Qualcomm's shares fell 2 percent in trading before the bell.
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