US semiconductor giant Broadcom, who has been after buying smartphone chip from Qualcomm for quite some time, is likely to have to wait even longer thanks to management opposition and US national-security concerns.
The deal, which has taken a long time to go through, is likely to be held up beyond a rescheduled shareholder vote next month, according to Bloomberg, as government regulators undertake an extended review of the proposed transaction's risks.
Qualcomm will hold a vote for its investors to decide on Broadcom's nominations to its board on the 5th April, which will also serve as a referendum on an offer that is worth $117 billion (around £84bn).
That meeting was rearranged from the 6th March, after the US Treasury Department ordered a 30-day postponement this week, to fully evaluate any potential national security threats raised by the takeover. However, experts say that such a review will not get done in just 30 days, and could take as long as 75 days.
"It's just big, and there's a lot to work through, and a lot of questions," a partner at law firm Alston & Bird in Washington, Jason Waite, said.
The news of further delays comes after months of to-and-fro, with Qualcomm board of directors unanimously rejecting Broadcom's acquisition proposals to acquire all of the firm's outstanding shares on several occasions.
The chip giant's last rejected proposal was for $82 per share, which breaks down to $60 in cash and $22 in Broadcom stock. A letter from Qualcomm chairman Paul Jacobs to Broadcom CEO Hock Tan details the decision:
"The Board has unanimously determined that your amended offer materially undervalues Qualcomm and falls well short of the firm regulatory commitment the Board would demand, given the significant downside risk of a failed transaction," it stated.
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