Qualcomm (QCOM 63.70, -1.04) is down 1.6% in pre-market after the semiconductor giant was asked by U.S. officials to delay its annual shareholder meeting. The company is currently considering a $117 billion buyout offer from Broadcom (AVGO 250.59, -0.28).
For background on this proposal, please review our Story Stocks comment from February 26.
Today's pre-market weakness in Qualcomm comes after the Committee on Foreign Investment in the United States asked the company to delay its shareholder meeting by 30 days, which would give the Committee time to conduct a full investigation of the proposed deal.
Qualcomm has previously expressed dissatisfaction with Broadcom's offer and the scrutiny from Cfius makes for another hurdle. Furthermore, the delay of Qualcomm's annual meeting means that the election of new directors will also be delayed. Broadcom is looking to get six directors nominated to Qualcomm's board, which would give Broadcom a majority and increase the likelihood of a deal being struck.
The Committee on Foreign Investment in the United States will review the proposed deal in January. Broadcom issued a response, accusing Qualcomm of committing a "desperate act to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom's independent director nominees."