Paul Jacobs the longtime chairman with Qualcomm Inc., will take a reduced role on the board of directors for the company, a move that is aimed at making angry shareholders less upset as the cellular giant based in San Diego attempts to fend off the hostile takeover bid being made by Broadcom Ltd.
At the same time, Intel Corp. a rival chipmaker, not wanting to compete with the strength of a combined Qualcomm and Broadcom is considering bidding for Broadcom reported the Wall Street Journal on Friday, citing sources who were unnamed.
Intel is hoping that Broadcom fails in its latest effort to acquire Qualcomm, but if it appears that Broadcom would have success, Intel may attempt to purchase Broadcom. That acquisition would be nothing less than huge. Intel, based in Santa Clara, California, has a $244 billion market value, while Broadcom’s is just more than $104 billion.
The report said that Intel may make other acquisitions that are much smaller if it does not attempt to acquire Broadcom.
Qualcomm, is pushing back against the bid by Broadcom, and announced a shuffle in its board on Friday. It announced that Jacobs, son to co-founder of Qualcomm Irwin Jacobs and the CEO at the company between 2005 and 2014, would no longer be the executive chairman or the chairman of the board. He would however, remain on the board itself.
Jeffrey Henderson, a member of the board of Qualcomm since 2016 following the efforts of Jana Partners an activist shareholder to change the corporation structure and governance at Qualcomm, will be the new chairman. The post of executive chairman will be eliminated.
Broadcom is attempting to gain control of the board at Qualcomm as part of its hostile takeover attempt of $117 billion. It made the stock performance of Qualcomm over the past four years the centerpiece of the takeover campaign saying it would do a much better job of company management.
It appears that this argument has started to resonate amongst shareholders at Qualcomm. A report on Friday said that Jacobs and CEO Steve Mollenkopf would be amongst the lowest vote getters in early balloting by stockholders for the new board at the company.
The six candidates nominated by Broadcom were leading in the vote count for the 11-member boards of Qualcomm. Approximately half the shareholders have cast their ballots said officials.
The voting was expected to end last week, but a delay of 30 days was ordered to investigate Qualcomm’s proposed takeover, by the Committee for Foreign Investment in the U.S.