(Reuters) – Qualcomm Inc’s (QCOM.O) board of directors was meeting on Friday to discuss former executive chairman Paul Jacobs stepping down after he told the U.S. semiconductor company he was exploring acquiring it, people familiar with the matter said on Friday.
The deliberations come just a few days after an order by U.S. President Donald Trump blocked a $117 billion hostile bid from Singapore-based rival Broadcom Ltd (AVGO.O) to acquire Qualcomm, due to national security concerns.
While Jacobs supported Qualcomm’s resistance to Broadcom’s bid, he increasingly clashed with other members of the San Diego-based company’s board, including Chief Executive Steve Mollenkopf, over how Qualcomm defended itself, the sources said.
Jacobs’ attempt this week to put together an offer to acquire Qualcomm by reaching out to investment firms including SoftBank Group Corp’s (9984.T) Vision Fund was a result of his disaffection, the sources added.
Jacobs is likely to step down from Qualcomm’s board, the sources said. His name would then be removed from Qualcomm’s slate of board director nominees at Qualcomm’s shareholder meeting next week.
The sources asked not to be identified because the deliberations are confidential. Qualcomm did not respond to a request for comment.
Jacobs did not immediately respond to a request for comment.
Qualcomm shares were up 1.7 percent at $60.95 in midday trading in New York on Friday, giving the company a market capitalization of around $90 billion.
Without an existing company as acquirer, Jacobs, whose father Irwin co-founded Qualcomm, is attempting to put together the largest leveraged buyout of all time, three times as large as the $45 billion buyout of Texas power utility Energy Future Holdings, which ended in bankruptcy.
Paul Jacobs has no meaningful stake in the company.
Even if SoftBank, a Japanese telecommunications group with technology investments around the world, wanted to join Jacobs’ bid, it could face conflicts given its ownership of British chip designer ARM Holdings Plc, sources said on Thursday. 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 U.S. national security panel that objected to Broadcom’s bid for Qualcomm.
Given that Qualcomm’s board director slate faces no competition, the re-election of Qualcomm’s nominees is assured. However, limited support for Qualcomm’s board directors could put pressure on Qualcomm CEO Steve Mollenkopf, who was criticized by some investors for inviting CFIUS to review Broadcom’s bid, to make changes to the company’s strategy.
Reporting by Greg Roumeliotis in New Orleans; Editing by Bill Rigby and Phil Berlowitz