The move sets the stage for a showdown over the future of San Diego's largest tech company. Shareholders will vote to support either Qualcomm's or Broadcom's board candidates, with the results expected to be announced at Qualcomm's annual meeting March 6.
Broadcom did not raise the $70-per-share offer price Monday, which valued Qualcomm at $103 billion. Qualcomm's board previously rejected that amount as too low.
Broadcom could still boost its offer before the March 6 annual meeting, making it more attractive to Qualcomm's shareholders.
Qualcomm said Monday that the Broadcom offer undervalues Qualcomm's growth prospects in internet-connected consumer and industrial devices (known as "the internet of things"), 5G cellular networks, automotive and data center/networking markets.
Tom Horton, Qualcomm's presiding director, said no company is better positioned than Qualcomm to bring mobile technologies to these industries.
"Qualcomm's stockholders expect a board that will support this innovation while evaluating objectively the full range of opportunities available to maximize value for all Qualcomm stockholders," said Horton, a senior advisor at Warburg Pincus and former chairman of American Airlines Group, in a statement.
Broadcom Chief Executive Hock Tan said Qualcomm's shareholders want the two companies to talk, but so far Qualcomm has ignored Tan's attempts to begin a dialogue.
"The nominations give Qualcomm stockholders an opportunity to express their disappointment with Qualcomm's directors and their refusal to engage in discussions with us," Tan said in a statement. "In light of the significant value our proposal provides for Qualcomm stockholders, we believe Qualcomm stockholders would be better served by new, independent, highly qualified nominees who are committed to maximizing value and acting in the best interest of Qualcomm stockholders."
Directors nominated by Tan have a wide range of experience in the financial and technology industries, including previously holding positions at Nokia and EMC Corp., among others.
The hostile takeover bid ramps up pressure on Qualcomm to complete its bogged-down, $38-billion acquisition of chip maker NXP Semiconductors, which aims to further diversify Qualcomm's business beyond smartphones. The NXP deal, announced more than a year ago, is still awaiting regulatory approval in Europe and China. In addition, some NXP shareholders want Qualcomm to increase its $110-per-share offer, which is below NXP's current trading price.
To date, fewer than 5% of NXP shareholders have pledged their shares in support of Qualcomm's offer. The company needs 80% to complete the deal.
Broadcom says its buyout bid for Qualcomm stands whether the NXP acquisition is completed or not. But Tan could condition an increase to his $70-per-share offer based on what happens with NXP -- including whether Qualcomm is forced to increase the price to close the deal.
Bernstein Research Analyst Stacy Rasgon wrote in a research note Monday that Tan now has three months to build support among Qualcomm shareholders for his slate of directors "in the face of what appears, at least at the moment, to be a strategic vacuum from Qualcomm."
"So far Qualcomm has yet to produce any sort of concrete response plan to Broadcom's overtures beyond 'trust us,' which we believe is going to become increasingly untenable as things progress," Rasgon wrote. "If they want to keep the company they better get cracking on a case as to why shareholders should trust in them instead of Hock, as we are not convinced Qualcomm shareholders necessarily believe that the Broadcom offer undervalues Qualcomm quite as much as Qualcomm management might believe."
Qualcomm argues that Broadcom is asking shareholders to replace its board now despite uncertainty about whether a deal could win regulatory approval. The combined company would be the leading supplier of many high-value semiconductors used in smartphones.
"These nominees are inherently conflicted given Broadcom's desire to acquire Qualcomm in a manner that dramatically undervalues Qualcomm to Broadcom's benefit," the company said in a statement.
Tan said initial meetings with antitrust regulators give him confidence that "any regulatory requirements necessary to complete a combination will be met in a timely manner." He expects the deal to close within 12 months of reaching an agreement.
Qualcomm has 11 board members -- nine of whom are independent and four of whom have been added in the last three years.
Broadcom shares fell nearly 3% on Monday to $263.61. Qualcomm shares slipped 1.4% to $64.56.