Qualcomm’s Former Chairman Said to Explore Taking Company Private

SAN FRANCISCO — Qualcomm was co-founded in 1985 by Irwin Jacobs, who took the company public and grew it into a mobile chips behemoth. He later passed the baton to his son, Paul Jacobs.

Now Paul Jacobs is trying to make sure that Qualcomm stays a family business.

Mr. Jacobs, a Qualcomm director, sent the company’s board a letter on Tuesday saying he wanted to explore taking the chip maker private and that he intended to talk to potential funding sources about the possibility, according to people briefed on the situation who declined to be named because the discussions were confidential. The board is holding a regularly scheduled meeting on Friday where Mr. Jacobs’s move — and whether he should stay on the board — is expected to be discussed, the people said.

The proposal from Mr. Jacobs follows months of turmoil at Qualcomm, which recently sidestepped a hostile $117 billion acquisition bid from rival semiconductor maker Broadcom and has also been dealing with a litany of regulatory and legal troubles around the world.

Mr. Jacobs was chairman of Qualcomm from 2009 until earlier this month, when he was replaced. The change was widely seen as a move to placate shareholders who had been voicing their displeasure by voting for a slate of six directors proposed by Broadcom as part of its bid to acquire the company.

Any takeover attempt by Mr. Jacobs faces extraordinarily tough obstacles. As an owner of less than 1 percent of Qualcomm shares, Mr. Jacobs would have to find investors to purchase equity in a transaction, as well as bankers willing to fund debt. Since Qualcomm directors had rejected Broadcom’s $117 billion offer as inadequate, the total price tag would likely have to be higher.

A Qualcomm spokeswoman declined to comment. Mr. Jacobs couldn’t be reached. Mr. Jacobs’s potential bid was earlier reported by The Financial Times.

In aiming to potentially take Qualcomm private, Mr. Jacobs is following a playbook used by Michael Dell. Mr. Dell, who founded Dell Computer in his university dorm room and built it into a personal computing colossus, took his company private in a $24.9 billion deal in 2013 after it had been battered by competition from Apple and the rise of mobile devices. Mr. Dell has since been working to turn Dell around, away from the prying eyes of Wall Street.

Content originally published on https://www.nytimes.com/2018/03/16/technology/qualcomm-taking-company-private.html by DON CLARK and ANDREW ROSS SORKIN