(Reuters) – Chipmaker Broadcom Ltd (AVGO.O) made its first formal move toward a hostile bid to take over Qualcomm Inc (QCOM.O) on Monday, laying out a slate of 11 nominees it wants to put on the board of the U.S. semiconductor firm.
Shares of both companies fell as Qualcomm confirmed receiving the list, saying Broadcom’s action was a “blatant attempt to seize control of the Qualcomm board in order to advance Broadcom’s acquisition agenda.”
Qualcomm last month rejected Broadcom’s $103 billion cash-and-stock bid, saying it dramatically undervalued the company, a line it repeated in Monday’s statement.
Shareholders will be able to vote for or against the Broadcom nominees at an annual meeting on March 6.
The list of nine men and two women included a former president of the mobile networks business group of Nokia and the former director and chairman of the board of Dialog Semiconductor Plc (DLGS.DE).
“We have heard from many Qualcomm stockholders who have expressed their desire for Qualcomm to engage with us,” Broadcom Chief Executive Hock Tan said in a statement on Monday.
“We have repeatedly attempted to engage with Qualcomm, and despite stockholder and customer support for the transaction, Qualcomm has ignored those opportunities. The nominations give … stockholders an opportunity to voice their disappointment.”
The slate will be heavily scrutinized, because the nominees will not just be asked to put Qualcomm up for sale, but will have to oversee the company until a deal with Broadcom closes.
“These nominees are inherently conflicted given Broadcom’s desire to acquire Qualcomm in a manner that dramatically undervalues Qualcomm to Broadcom’s benefit,” Qualcomm said.
Reuters reported on Sunday that Broadcom would unveil the nominees on Monday and that private equity firm Silver Lake, an investor in Broadcom, helped with the effort to recruit the nominees.
Qualcomm said in its statement on Monday that Broadcom and Silver Lake were effectively asking stockholders to foreclose options and make a decision now on a non-binding proposed transaction that may not be completed for well over a year.
Broadcom did not give details of any new offer for Qualcomm. Reuters reported last month that Broadcom was considering raising its offer by offering more of its own stock.
Qualcomm shares fell 1.6 percent in morning trade, while Broadcom lost almost 3 percent.
Reporting by Aishwarya Venugopal in Bengaluru; editing by Patrick Graham and Saumyadeb Chakrabarty