Qualcomm Incorporated (NASDAQ: QCOM) is playing defense in its ongoing saga with a potential buyout offer. It is quite entertaining to watch. What we find interesting is that today announced that the Qualcomm Board of Directors, following the recommendation of the Board’s Governance Committee, has unanimously determined not to nominate any of the 11 candidates assembled by Broadcom Limited (AVGO) and Silver Lake Partners to replace Qualcomm’s current directors at Qualcomm’s 2018 Annual Meeting of Stockholders.  Qualcomm today also filed its preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with Qualcomm’s upcoming 2018 Annual Meeting. This has some serious implications:

After a thorough review of the Broadcom-Silver Lake nominees, the Governance Committee concluded that these nominees are inherently conflicted and would not bring incremental skills or expertise to the Qualcomm Board. Qualcomm’s Board is nominating its 11 incumbent directors for re-election at the 2018 Annual Meeting: Barbara T. AlexanderJeffrey W. HendersonThomas W. Horton, Dr. Paul E. JacobsAnn M. LivermoreHarish ManwaniMark D. McLaughlinSteve MollenkopfClark T. Randt, Jr., Dr. Francisco Ros and Anthony J. “Tony” Vinciquerra.

Qualcomm’s existing Board has a deep understanding of the global IP/licensing and semiconductor business and relevant adjacent industries, and has overseen the design and execution of Qualcomm’s strategy, including driving its leadership in mobile, IoT, automotive, edge computing and networking, as well as the coming transition to 5G. Qualcomm’s Board remains focused on driving profitable growth and maximizing value for all stockholders.

Broadcom and Silver Lake are asking Qualcomm stockholders to turn over control of their Company now to the hand-picked Broadcom-Silver Lakenominees based on a proposal that dramatically undervalues Qualcomm and is not actionable due to its significant regulatory uncertainty, which may not be resolved for 18 months, if ever, and lack of committed financing.  Broadcom has made no commitments to resolve the serious regulatory issues inherent in its proposal.

Qualcomm’s Board is committed to maintaining best-in-class corporate governance. Qualcomm directors are elected annually and 9 of the 11 directors are independent, including 4 directors added in the last 3 years.  The incumbent directors have a mix of industry perspectives, operating and financial expertise, corporate restructuring experience and IP/licensing expertise, as well as a long history of collaborative stockholder engagement, all of which collectively drive performance and stockholder value.

Detailed information about Qualcomm’s director nominees is included in the Company’s preliminary proxy statement. Also included is a “Background to the Solicitation” section, which details all interactions between Qualcomm and Broadcom relating to Broadcom’s unsolicited acquisition proposal.

 

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