— Since Paul Jacobs said his goodbyes to shareholders and the board of directors during Qualcomm Inc.’s annual shareholders meeting in March, the company’s former CEO and chairman of the board has been relatively quiet.

But his name has entered the business world’s limelight again following media reports that he’s continuing his plan to gather investors for a potential bid on Qualcomm in order to take the company private.

The plan, which he announced following the failed $117 billion takeover bid by Broadcom Ltd., also got him removed from the board of the company his father, Irwin Jacobs, co-founded.

‘A Real Longshot’

At the time, Jacobs’ plan was seen as far-fetched — it’s still being seen that way, according to some analysts.

“I think it’s a real longshot,” said Bob O’Donnell president and chief analyst of TECHnalysis Research LLC. “It would be very difficult to line up the amount of money he would need to do it.”

However, it’s possible, according to Stacy Rasgon, managing director and senior analyst at Bernstein, that if Jacobs can raise the money, Qualcomm shareholders would be willing to sell.

“They were ready to hand the business over to Hock (Hock Tan, CEO of Broadcom Ltd.),” Rasgon added.

Whatever Jacobs plans to offer for Qualcomm, Rasgon believes it will have to be more than the Broadcom offer.

“That makes the deal big,” he said.

When Broadcom offered $82 per share for Qualcomm, the board of directors, with Jacobs at the helm, said it woefully undervalued the company.

“How can you be chairman of the board (as Jacobs was at the time) and totally reject the Broadcom deal on the basis that it vastly undervalued (it) and then buy it himself for less,” Rasgon said.

Imagine the lawsuits, he added.


There are other companies that have gone from public to private.

San Diego-based Petco Animal Supplies Inc. has had a history of fluctuating from private to public.

Founded as a mail-order veterinary supplies business in 1965, Petco first went public in 1994 on the Nasdaq. In 2000, the retailer returned to private ownership in a leveraged buyout by Leonard Green & Partners and Texas Pacific Group (TPG).

Petco became publicly traded again in 2002, until 2006 when the company was taken private by a group of investors led by TPG, according to Petco’s company history.

Petco has continued to be privately-held since then. In 2016, CVC Capital Partners and Canada Pension Plan Investment Board acquired the company from (TPG) and Leonard Green & Partners for $4.6 billion.

The company now has more than 1,500 stores in the U.S., Mexico and Puerto Rico.

8 Months for Dell

But the most widely cited example has been Dell.

It took eight months for Dell to go private when its founder, Michael Dell, announced his plans in February 2013. With the help of private equity firm, Silver Lake Partners, the purchase — for $25 billion — was closed in October 2013.

Dell said the “company needs to go private so it can restructure to cope with the new computing landscape away from the quarterly pressures of Wall Street,” according to a 2013 article in The Guardian.

As reported in a New York Times article, the deal did saddle the company with an additional $15 billion in debt.

Earlier this year, however, Dell had been considering going public again to help raise cash and reduce substantial debt, according to several media reports.

CFIUS’ Attention

Buyout with foreign investors was sort of the whole thing that torpedoed the Broadcom case, Rasgon said.

“Presumably, whatever investors (Jacobs) has to be looking at, they can’t have any connections to China,” he said.

According to a CNBC article, sources close to Jacobs said that he had been “working with CFIUS behind the scenes to address potential problems, which theoretically could arise if a large amount of the economic ownership comes from foreign sovereign wealth funds.”

“The challenge is, if he has to go to large funds of money that are outside the U.S., the very issue that caused the Broadcom purchase to be turned down, will obviously raise their head again,” O’Donnell said. “Because of the precedent that’s been set, it’s going to make it that much harder to pull this off.”

Broadcom Part 2?

With Broadcom having fully relocated to the U.S., earlier this month, O’Donnell said he didn’t think the company would make another play for Qualcomm.

“The fact that they (Broadcom) were so close to doing it, and yet the deal was still turned down, I can’t imagine them turning on again and wanting to do it,” O’Donnell said.

As of now, there’s no offer on the table for Qualcomm, Rasgon explained.

“Qualcomm’s got to stay on the path. Until you get an offer that you can evaluate, you’ve got to go on your plan,” he added.