Proxy advisory company Institutional Shareholder Services said semiconductor company Qualcomm Inc. should engage in talks with rival Broadcom Ltd over a deal, Reuters and Bloomberg News reported.
In a report published Feb. 16, ISS did not recommend in favor of the $121 billion deal offered by Broadcom, according to the media outlets. Qualcomm's board rejected Broadcom's revised $82-per-share bid, arguing that it undervalues the company, among other things.
According to Reuters, the proxy adviser did recommend that Qualcomm shareholders elect four of the six nominees Broadcom has put forward for election to the company's 11-member board at Qualcomm's shareholder meeting March 6. That move could pave the way to a deal between the two companies.
The two companies most recently met Feb. 14 to discuss their differences. Qualcomm Chairman Paul Jacobs said after the meeting that the board is "open to further discussions with Broadcom to see if a proposal that appropriately reflects the true value of Qualcomm shares, and ensures an appropriate level of deal certainty, can be obtained."
Broadcom has received financing commitments of $100 billion to fund a potential deal.
Reuters did not receive comment on the matter from representatives of either company.