Broadcom's bid last week represented a 28 percent premium over the closing price of Qualcomm shares on November 2, but analysts were expecting Qualcomm to reject the $70-per-share bid.
The bid "significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects", Paul Jacobs, chairman and son of Qualcomm co-founder Irwin Jacobs, said in a statement. 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.
It's not yet clear how Broadcom will respond to Qualcomm's rejection of its first offer.
Broadcom execs believe that, even if Qualcomm's board doesn't like the deal, they can convince enough of the company's shareholders to take the offer and win approval from government regulators.
Shortly after Qualcomm issued its statement on Monday turning down the $70-per-share bid, Broadcomm fired back nearly immediately with an announcement of its own maintaining that its offer was the best the embattled Qualcomm could hope to get.
Broadcom Ltd., also announced, in the company of President Donald Trump, that it would bring its corporate address back from Singapore, to Delaware. We are not sure whether Broadcom can initiate a proxy fight to get the deal approval from Qualcomm's board.
Both semiconductor companies did not immediately respond to requests for comment.
Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment. It is engaged in a patent infringement dispute with Apple Inc (AAPL.O), and is also trying to close its $38 billion acquisition of automotive chipmaker NXP Semiconductors NV (NXPI.O) after signing a deal in October 2016.
This could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer.