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Broadcom Ltd.'s (AVGO) is considering launching a boardroom battle at Qualcomm Inc. if the chipmaker rejects its $130 billion unsolicited acquisition offer, according to reports.

The prospects for a proxy war have emerged, according to Bloomberg, after Broadcom offered on Monday to acquire Qualcomm for $70 a share in cash and stock. Qualcomm has said it has received the offer but has yet to make a decision on it. And the potential deal comes as Qualcomm is in the midst of completing a $47 billion acquisition of NXP Semiconductors (NXP) , a transaction that was announced in October 2016.

Broadcom said its proposal stands whether Qualcomm's current acquisition of NXP is consummated or if it is terminated.

Nevertheless, there is a serious possibility that Qualcomm will reject the Broadcom overture and seek to complete its NXP acquisition instead. Such a move could drive Broadcom to launch a proxy battle to replace Qualcomm's board with directors amenable to a deal. According to Qualcomm's proxy statement, all its directors are elected annually. Broadcom would need to nominate its director slate by Dec. 8 so that they could be considered at the company's 2018 annual meeting, likely in March.

If Qualcomm wants to fight the Broadcom bid, they will be highly incentivized to get the NXP deal done. If that's true, they could play right into the hands of activist Elliott Management's Paul Singer, who has a 6% NXP stake and recently launched a so-called bumpitrage campaign to push Qualcomm to pay a higher price for NXP. However, should Qualcomm agree to combine with Broadcom it could result in the unraveling of the NXP deal, which could be bad news for Elliott.

Broadcom is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AVGO? Learn more now.

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