Ousted Qualcomm Chairman Targets June Buyout: Report

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Qualcomm's ousted Executive Chairman Paul Jacobs is still planning to take the company private and is targeting a June buyout at the latest, CNBC reported Thursday, citing people familiar with the matter. Mr. Jacobs already confirmed his interest in acquiring the San Diego, California-based chipmaker co-founded by his father Irwin Jacobs, with the firm's board opting to remove him from his position of a director following that disclosure in mid-March. The official was already relieved of his duties as an Executive Chairman at that point, having been demoted while Qualcomm was still fighting off a hostile takeover attempt from Broadcom. Mr. Jacobs was hence the first executive victim of the Qualcomm-Broadcom struggle that ended earlier this spring after President Trump signed an order that effectively served as a hands-off warning to Broadcom.

The ousted official is now said to have approached mobile chip design firm Arm and its parent SoftBank, seeking to discuss a potential deal that would see at least one of the two technology giants fund an acquisition of Qualcomm that would take the company private, i.e. delist it from the public market. Arm is one of Qualcomm's business partners and the entity responsible for designing the processor architecture used by the chipmaker. The company already denied holding buyout talks with Mr. Jacobs who hired a roster of attorneys and two banks to work on realizing the deal, industry insiders claim.

Broadcom's $117 billion offer was on course of being accepted by Qualcomm's shareholders who were reportedly prepared to vote out the firm's existing board and replace it with Broadcom's own nominees before President Trump killed the deal earlier this year. Due to that state of affairs, a potential buyout likely wouldn't surpass the last offered figure and could potentially be even lower. Mr. Jacobs is understood to be targeting a deal that would see Qualcomm acquired by fewer than ten parties in total and allow the firm to continue being controlled from the United States so as to avoid the type of foreign investment-related regulatory scrutiny Broadcom attracted even as it pledged to move its headquarters back to the U.S., a move that has now been completed.

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Enlisting SoftBank's help wouldn't allow Mr. Jacobs to partially or completely fund his buyout through the Japanese tech giant's Vision Fund as Qualcomm itself is a contributor to the multi-billion cash pool. Instead, such a move could only be financed by SoftBank Group itself. One insider claims Mr. Jacobs wants to keep Qualcomm unified but doesn't see a long-term path for the company without private ownership as many investments he deems necessary are something he believes public stakeholders wouldn't approve. The former executive would also continue committing to Qualcomm's licensing business following a theoretical buyout as he still considers it the company's most robust unit with best long-term prospects, sources claim.