tiptrot.com March 21, 2018

Broadcom return to U.S. could be complete in May

06 March 2018, 01:41 | Deanna Wagner

Qualcomm says Broadcom deal opens national security issues

Broadcom return to US could be complete in May

U.S. Senator Tom Cotton said on Monday he backed a U.S. government panel's decision to delay a Qualcomm Inc shareholder meeting to allow for a more extensive review of Broadcom Ltd's takeover bid.

"The Committee on Foreign Investment in the United States (CFIUS) issued an interim order to Qualcomm directing it to postpone its annual stockholders meeting and election of directors by 30 days", said the U.S. Department of the Treasury on Sunday in an official statement.

The vote was set to take place Tuesday at Qualcomm's annual shareholders meeting.

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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.

During a public ceremony at the White House Nov. 2, Broadcom CEO Hock Tan announced to President Donald Trump and others that he would be moving his company to the U.S. That announcement came as CFIUS was reviewing another merger proposal, Broadcom's bid to purchase Brocade Communications Systems. Broadcom had two meetings on February 14, 2018 and on February 23, 2018 with Qualcomm.

Previously, Broadcom has said it would walk away from its $79 per share offer to acquire Qualcomm should the annual meeting be delayed past March 6.

Broadcom had not claimed that it was surprised by the CFIUS investigation, but that it had not known that Qualcomm's voluntary request was behind the probe.

Broadcom's attempted takeover of Qualcomm, initially unveiled in November, would be the largest technology deal in history, creating an industry giant whose products would be in a majority of the world's smartphones.

Qualcomm Chief Executive Officer Steve Mollenkopf has so far received the second-lowest number of votes among the combined 17 nominees from both sides, according to the data seen by Bloomberg.

Separately, Broadcom said on Monday that the decision by CFIUS was the result of secret moves made by Qualcomm on January 29 to encourage an investigation into the offer, which Qualcomm's board has said significantly undervalues the company.

The two companies are locked in a battle over the future of Qualcomm, whose board and management say Broadcom's offer is a gambit to steal the company on the cheap.

Broadcom is incorporated and now based in Singapore, but CEO Hock Tan announced late past year while visiting President Donald Trump at the White House that the company would return its corporate headquarters to the US, likely using San Jose as a base.

Shares of Qualcomm (qcom) lost nearly 2% to hit $63.71 in midday trading on Monday and remain well below Broadcom's offer price.

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