Broadcom says Qualcomm asked US security panel to delay shareholder meeting

Qualcomm building is shown in San Diego California U.S. Mike B  REU

The order by the Committee on Foreign Investment in the United States (CFIUS), which reviews deals that have potential national security implications, heightened tensions between the two companies that have been apparent since China-based Broadcom first proposed buying Qualcomm in November 2017 in what would be by far the largest deal in tech history.

There's a lot riding on Qualcomm's shareholder meeting, which was set to take place on Wednesday but will now be delayed by 30 days.

Broadcom's courtship of Qualcomm just got a bit more interesting.

Broadcom has nominated six alternative candidates to Qualcomm's 11 member board of directors in a hostile takeover bid.

Broadcom slammed Qualcomm's decision to "secretly" file a voluntary request with CFIUS to start an investigation, labeling it a "blatant, desperate act" to entrench its incumbent board of directors.

Qualcomm has argued that Broadcom's $117 billion offer undervalues the company.

Broadcom is largely owned by the same United States institutional investors that own Qualcomm. Broadcom has accused Qualcomm of failing to negotiate seriously, saying they were involved in "engagement theater". It characterized Broadcom's release as "a continuation of its now familiar pattern of deliberately seeking to mislead shareholders and the general public".

"Broadcom's dismissive rhetoric notwithstanding, this is a very serious matter for both Qualcomm and Broadcom", the USA chipmaker said.

Reuters reported last week that CFIUS had begun looking at Broadcom's bid amid growing pressure from lawmakers, including President Donald Trump's fellow Republicans in Congress. The interagency body, which is known as Cfius, includes representatives from the Treasury and Justice Departments. It was Qualcomm itself that issued the request for the CFIUS to review the deal.

While the suggested price of $79 per Qualcomm share - or $82 per share should Qualcomm's planned buyout of NXP Semiconductors fail - has been a constant point of argument, Qualcomm has also said in the past that regulatory hurdles are a serious challenge.

Qualcomm went on to challenge an assertion that wasn't exactly what Broadcom had asserted.

Broadcom has been trying for months to take over Qualcomm in a blockbuster $95 billion deal that would massively consolidate the semiconductor market.

The San Diego-based company's stock was trading at $64, down about 1 percent, on Monday morning.

Qualcomm and Broadcom are two of the biggest makers of components that are crucial to modern communications systems, including fixed-line and mobile.

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