Former Qualcomm Chairman Looking for Funds to Buyout

Published on: 16 Mar, 2018

Former Qualcomm Inc. (NASDAQ: QCOM) chairman, Paul Jacobs is interested in taking the chipmaker private, potentially making it the largest buyout in history, CNBC, citing sources familiar with the matter.

Jacobs informed the board of his plans and approached multiple investors, including Softbank Group to help fund his buyout proposal for the $88 billion chipmaker, first report by the Financial Times.

Although, sources said that Softbank would not back Jacobs takeover attempt because it would undermine Softbank’s own chipmaker segment, ARM Holdings and take a deficit to the company’s finances.

Jacobs resigned last week from his position as executive chairman after U.S. President Donald Trump’s administration had blocked a bid from Broadcom to takeover the chipmaker. The Committee on Foreign Investment in the U.S. said the deal was blocked due to national security concerns, marking it one of the many Chinese deals that have been blocked by officials.

The deal was blocked by administration saying that the merger between Broadcom and Qualcomm would potentially hurt the race to 5G technology for the U.S. against China. Broadcom offered many proposals in order to alleviate the national security concern, such as moving its headquarters to the U.S., which the company intends to do regardless of the deal.

Prior to the deal being blocked, which Jacobs and majority of the Qualcomm disapproved of, some members did not receive enough investor support as Broadcom was going to replace board members. Broadcom’s board changeup was on track to pass, meaning Jacobs would have been demoted or kicked off the board.

Jacobs only owns 1 percent of the company’s shares, according to data compiled by Bloomberg. If Jacobs were to pursue the buyout, it would be a difficult challenge for him and his group of investors to offer a bid much higher than Broadcom’s offer of $117 billion.

Qualcomm shares were trading 2 percent higher on Friday.

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Marco Zhou

Email: Marco@financialinsiders.com

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