The original approach came on November 6, when Broadcom offered $70 a share for Qualcomm.
USA chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.
Qualcomm's board concluded that "Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty", said Tom Horton, Qualcomm's presiding director, said in the company's statement.
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In an email, a Qualcomm spokesperson said the company "won't have any comment beyond this statement".
The deal's future could hinge on each side's prospects for resolving the dispute with Apple, which has withheld royalty payments it owes for its use of Qualcomm's technology and has moved to stop buying Qualcomm's chips. They also stated that Broadcom "undervalues" them.
Qualcomm has a message for its prospective buyer: Sorry, but we're worth more than you think.
This is just not how these big acquisitions work, usually, these companies sit together, work for a while and try to negotiate important details and then go to the public.
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If Broadcom makes a hostile bid, Qualcomm's governance rules would allow the rival to submit its own slate for the entire 10-member board by the December 8 nomination deadline.
Singapore-based Broadcom made the offer last week in what would have consolidated two major players in the booming sector fueled by growth in smartphones and other connected devices.
In making its offer for Qualcomm, Broadcom CEO Hock Tan said the transaction "will position the combined company as a global communications leader with an impressive portfolio of technologies and products". "We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders". The preparations for the board meeting indicate that Qualcomm is poised to rebuff the bid as insufficient as early as Monday, although it may decide to spend a few more days this week to prepare its full response to Broadcom, the sources added.
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