By Dana Cimilluca, David Benoit and Dana Mattioli 

Qualcomm Inc. took the extraordinary step of removing former Chairman and Chief Executive Paul Jacobs from its board after he broached a long-shot bid for the chip-making giant.

The decision to oust Mr. Jacobs was made at a board meeting Friday, according to people familiar with the matter. At the meeting, he reiterated his desire to pursue a potential buyout after raising the issue in a letter to the board Tuesday, according to a person familiar with the events.

Several directors tried to talk Mr. Jacobs out of the idea, which they regard as far-fetched, this person said. When he persisted, the rest of the board asked him to step down because they don't believe he can be a director and work on a bid at the same time. Mr. Jacobs disagreed. The board took a vote and he lost, this person said.

It has also told him he cannot use insider information for work on any bid.

In a statement late Friday announcing the move, the possibility of which was earlier reported by The Wall Street Journal, Qualcomm said Mr. Jacobs won't be renominated to the board at the annual meeting next week.

"Following the withdrawal of Broadcom's takeover proposal, Qualcomm is focused on executing its business plan and maximizing value for shareholders as an independent company," it said. "There can be no assurance that Dr. Jacobs can or will make a proposal, but, if he does, the board will of course evaluate it consistent with its fiduciary duties to shareholders."

Mr. Jacobs released a statement saying: "There are real opportunities to accelerate Qualcomm's innovation success and strengthen its position in the global marketplace. These opportunities are challenging as a stand-alone public company, and there are clear merits to exploring a path to take the company private."

He added: "It is unfortunate and disappointing they are attempting to remove me from the board at this time."

Mr. Jacobs couldn't be reached for further comment.

On Monday, President Donald Trump blocked Broadcom Ltd.'s $117 billion hostile bid for Qualcomm, reflecting officials' concerns about an intensifying arms race between the U.S. and China over advanced technologies.

The latest round of drama at Qualcomm comes a week after Mr. Jacobs was stripped of the title of executive chairman against his will after some investors complained about his pay and argued that having separate roles of executive chairman and chief executive causes confusion about who is in charge, according to another person.

Mr. Jacobs was replaced with an independent director and the move was widely seen as an effort by Qualcomm to enhance its governance and bolster its case against Singapore-based Broadcom. According to people familiar with the matter, Mr. Jacobs was unhappy about the move.

At an annual meeting that was scheduled to occur earlier this month, Qualcomm shareholders were to vote on whether to oust current board members in favor of directors nominated by Broadcom. The meeting was delayed at the behest of the Committee on Foreign Investment in the U.S. before the deal was blocked by Mr. Trump.

It is now scheduled to take place next Friday and Qualcomm directors are expected to be re-elected unopposed as the Broadcom ballots won't be tallied.

Had the vote gone ahead as originally planned, a number of Qualcomm directors were expected to lose their seats, including possibly Mr. Jacobs, people familiar with the matter said.

Mr. Jacobs, the son of Qualcomm's co-founder, owns just 0.13% of Qualcomm, which is based in San Diego and has a market value of about $90 billion. To pull off a takeover of the company, which would cost upward of $100 billion, he would need to secure an inordinate amount of financing, and it isn't clear where he would get it.

Mr. Jacobs took over as chief executive from his father, Irwin, in 2005, before passing the baton to current CEO Steve Mollenkopf in 2014.

--Ted Greenwald contributed to this article.

Write to Dana Cimilluca at dana.cimilluca@wsj.com, David Benoit at david.benoit@wsj.com and Dana Mattioli at dana.mattioli@wsj.com

 

(END) Dow Jones Newswires

March 16, 2018 19:45 ET (23:45 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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