Broadcom, Post-Qualcomm Bid, Sees New ‘Potential’ Acquisition ‘Targets,’ Says CFO
Though Broadcom formally ended its bid to buy Qualcomm Wednesday and complied with President Donald Trump’s order to withdraw its slate of nominees for election to the Qualcomm board (see 1803140057), Broadcom’s “understanding” is that Qualcomm’s own nominees running for…
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the board at the company's March 23 annual meeting "are only garnering between 15 to 16 percent" of the total Qualcomm shares outstanding in a proxy vote “tally” through Thursday, said Broadcom Chief Financial Officer Tom Krause on a Thursday earnings call. That’s “not necessarily something to celebrate down in San Diego,” said Krause in an obvious jab at Qualcomm’s management, which fought for months to beat down Broadcom's hostile takeover bid. Qualcomm representatives didn’t comment. Broadcom doesn’t see “this week’s events putting any constraints on our ability to pursue acquisitions more broadly,” said Krause. He and CEO Hock Tan “are quite familiar with the industry landscape, and sitting here today, we do see potential targets that are consistent with our proven business model,” he said. Qualcomm was “clearly a unique and very large acquisition opportunity,” he said. “Given the maturity of the industry” and the “consolidation it has seen,” any future Broadcom acquisitions “are much more likely to be funded with cash available on our balance sheet,” rather than financed through banks, he said. Broadcom executives refused to take questions on the call about the failed Qualcomm bid.