U.S. asks Qualcomm to delay meeting for security review of Broadcom bid

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The order adds to signs that Broadcom's promise to move its official base back to the United States before it completes the proposed $117 billion takeover may not be enough for US officials at a time when global trade tensions are rising.

Broadcom meanwhile fired off a letter of its own, urging Qualcomm shareholders to elect all six of its nominees to the board, sending "a clear signal" supporting the takeover bid which would provide a handsome gain to shareholders of the U.S. firm.

T. Rowe voted for all six of Broadcom's nominations, a move which, if followed by enough other shareholders, would give the bidder control of the 11-person Qualcomm board that has so-far shunned the approach.

Broadcom said it was notified on Sunday night that Qualcomm had secretly filed a voluntary request with CFIUS on January 29 to initiate an investigation into its possible takeover by a foreign company.

In 2011 Chinese smartphone maker Huawei was forced to unwind a $2 million offer to acquire the assets of a failed US company, 3Leaf Systems, when CFIUS determined that 3Leaf's technology could be used in ways that were not in the best interests of the United States. Broadcom cried foul, saying this latest turn of events is an "engagement theatre", aimed at changing the will of Qualcomm stockholders. "It is critical that Qualcomm stockholders know that Qualcomm did not once mention submitting a voluntary notice to CFIUS in any of its interactions with Broadcom to date".

Qualcomm is known for mobile chip innovations that set industry standards, for example in new superfast 5G wireless connection technology, the analyst noted.

The endorsement of Broadcom's nominees would represent a rejection of Qualcomm's assertion that the company would be stronger if run as a stand-alone business. If it had won the shareholder vote, . The takeover was to have come at a meeting scheduled for tomorrow, March 6. "This measure will afford CFIUS the ability to investigate fully Broadcom's proposed acquisition of Qualcomm".

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 said it would challenge that fine.

Broadcom has been trying for months to take over Qualcomm in a blockbuster $95 billion deal that would massively consolidate the semiconductor market. Qualcomm has about 1.4 billion shares outstanding. CFIUS still has to rule on the potential acquisition, of course, but Qualcomm is probably hoping that an outcry against the takeover of state-of-the-art technology by a foreign buyer will force Broadcom to go away.