Proxy Adviser Supports Some Broadcom Board Nominees

A top proxy advisory firm has recommended that Qualcomm investors support some but not all of Broadcom's board of director nominees as a catalyst for a negotiated deal between two semiconductor giants.

After meeting with both Broadcom and Qualcomm representatives last week, Institutional Shareholder Services (ISS) called for shareholders to support four of Broadcom's six nominees for Qualcomm's 11 member board of directors.

That would give Broadcom a minority position on Qualcomm's board -- not the majority six seats that it's seeking at Qualcomm's March 6 annual meeting to push through its $121 billion hostile takeover.

But four board members would be within striking distance of a majority, which ISS believes would result in talks toward a sale.

"We consider that the election of four Broadcom nominees to the 11-member board seems to offer a reasonable path to a negotiated deal, which is likely to be the most beneficial path for shareholders," said ISS.

Recommendations from ISS and rival proxy adviser Glass Lewis are important for mutual funds, hedge funds and other large institutional investors -- which make up 78 percent of Qualcomm's shareholder base.

Some of these funds automatically follow the recommendations of ISS and Glass Lewis. Others are influenced by the guidance but aren't bound to follow it when voting their shares.

Glass Lewis is expected to make recommendations soon.

Qualcomm, whose technologies power cellular connections in most smartphones, has been embroiled in a hostile takeover battle with rival chip maker Broadcom since November.

Broadcom originally nominated 11 candidates to challenge all of Qualcomm's board members. Earlier this month, it cut its slate of nominees to six because of shareholder concerns over continuity during a possibly long regulatory review.

Qualcomm met with Broadcom on Feb. 14 for the first time and said it is open to additional talks. Even so, Qualcomm's board rejected Broadcom's $82 per share buyout...

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