ISS questions Qualcomm's commitment to negotiating with Broadcom

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(Bloomberg) -- Qualcomm Inc. was criticized by Institutional Shareholder Services Inc. for failing to tell hostile suitor Broadcom Ltd. what an acceptable bid price might be, raising questions about the board’s commitment to negotiating a deal, the proxy adviser said.

The influential advisory firm maintained its partial support for Broadcom’s offer in an updated report published late Thursday. It has recommended voting for four of the six Qualcomm board nominees Broadcom has put forward, two fewer seats than the hostile bidder needs for a majority to force Qualcomm to accept a takeover. Investors are due to vote March 6.

“The Qualcomm board has yet to communicate to Broadcom (in the course of private discussion) its expectations regarding an acceptable equity value range,” ISS said in the latest report. “This continues to raise the question of whether the incumbent board is engaging with seriousness and an objective to maximize shareholder value.”

ISS also said that Qualcomm has created more certainty for investors on its standalone plan by raising its own offer to buy NXP Semiconductors NV. Qualcomm isn’t paying too much for NXP and is giving "sound strategic rationale" for the purchase, the proxy adviser added.

On Wednesday, Broadcom lowered its bid for Qualcomm to $79 a share in cash and stock from an earlier "best-and-final" offer of $82. The price cut was triggered by Qualcomm raising its NXP offer, against Broadcom’s wishes, the latter company said. Qualcomm argued that Broadcom’s lower bid made an unacceptable offer worse.

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