Former Qualcomm Inc chairman Paul Jacobs told its board of directors that he would seek to partner with investment firms to make an offer for the US semiconductor company, people familiar with the matter said on Thursday.
Jacobs’ attempt to put together an offer comes just a few days after Qualcomm fended off a US$117 billion hostile bid from Singapore-based rival Broadcom Ltd, thanks to an order by US President Donald Trump prohibiting the deal, citing to national security concerns.
Qualcomm does not view Jacobs’ attempt to put together a buyout bid as credible, the three sources said, adding that Jacobs has held talks with several investment firms, including Softbank Group Corp’s Vision Fund, but has so far been unable to secure the necessary financing.
Jacobs is attempting to put together the largest leveraged buyout of all time, three times as large as the US$45 billion buyout of Texas power utility Energy Future Holdings Corp in 2007, which ended in bankruptcy.
Even if Softbank, a Japanese telecommunications group with technology investments worldwide, wanted to join Jacobs’ bid, it could face conflicts given its ownership of British chip designer ARM Holdings PLC, said the sources, who asked not to be identified because the deliberations are confidential.
Adding to the potential conflicts, Qualcomm is an investor in the Vision Fund.
Softbank’s deals are also subject to review by the Committee on Foreign Investment in the United States (CFIUS), the US national security panel that also objected to Broadcom’s bid for Qualcomm.
Qualcomm declined to comment, while Jacobs and Softbank could not be immediately reached for comment. The Financial Times first reported on Jacob’s buyout efforts earlier on Thursday.
Jacobs, who still sits on Qualcomm’s board, was stripped of his title of executive chairman earlier this month when Jeffrey Henderson, another Qualcomm director, was named non-executive chairman.
While Jacobs shared the view of Qualcomm’s board that Broadcom’s bid undervalued the company and was fraught with regulatory risks, many on Qualcomm’s board blamed him for the dissatisfaction of some Qualcomm’s shareholders with the company’s handling of Broadcom’s bid, the sources said.
Jacobs, whose father, Irwin, cofounded Qualcomm, are up for re-election as board director, alongside other Qualcomm nominees, at the company’s shareholder meeting on Friday next week.
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