U.S. regulators have stepped in to delay Qualcomm’s annual shareholder meeting, originally set for Tuesday (March 6) to give investigators time to investigate whether Broadcom’s unsolicited bid for the rival chipmaker would threaten national security.
Broadcom is based in Singapore, but announced last November that it is moving its headquarters back to the United States.
Reuters reported Sunday that the U.S. Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) issued an interim order to Qualcomm to postpone the company’s annual stockholder meeting.
Tied to its unsolicited bid for Qualcomm, Broadcom is attempting to elect six nominees to Qualcomm’s board.
Broadcom blasted the move to delay the meeting, but said it’s committed to cooperating fully with CFIUS.
“Broadcom was informed on Sunday night that on January 29, 2018, Qualcomm secretly filed a voluntary request with CFIUS to initiate an investigation, resulting in a delay of Qualcomm's Annual Meeting 48 hours before it was to take place,” Broadcom said in a statement. “This was a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom's independent director nominees.”
Broadcom also claimed that Qualcomm didn’t mention submitting a voluntary notice to CFIUS in any of its interactions with Broadcom to date, including meetings held on February 14 and February 23.
“This can only be seen as an intentional lack of disclosure – both to Broadcom and to its own stockholders. This brings Qualcomm's ‘engagement theater’ to a new low,” Broadcom said, adding that it is committed to moving its headquarters to the U.S., and that the process is “well underway.”
Further, Broadcom claimed that its proposed acquisition of Qualcomm will not be a CFIUS-covered transaction, and that its board and senior management team consists “almost entirely of Americans.”
Last week, Qualcomm provided Broadcom a “mark-up” to the Broadcom proposal that, Qualcomm believes, could resolve all of the issues, save for the price, which it believes continues to undervalue Qualcomm.
As of 10:19 a.m. ET Monday (March 5), Qualcomm had yet to comment on the request to day the shareholder’s meeting.
Update: Qualcomm issued a statement holding that Broadcom knew about the submissions to CFIUS, and that “this is a very serious matter for both Qualcomm and Broadcom.”
“Broadcom’s claims that the CFIUS inquiry was a surprise to them has no basis in fact,” Qualcomm said. “Broadcom has been interacting with CFIUS for weeks and made two written submissions to CFIUS.”
Qualcomm said Broadcom’s response from the CFIUS order “is a continuation of its now familiar pattern of deliberately seeking to mislead shareholders and the general public by using rhetoric rather than substance to trivialize and ignore serious regulatory and national security issues.”
Qualcomm also confirmed that, in compliance with the CFIUS order, the company will delay its annual meeting of shareholders and election of directors for at least 30 days to provide time for the CFIUS to run its investigation.