Emulex turns down Broadcom's 'opportunistic' $9.25-per-share offer

By Lisa Kerner

Charlotte, N.C., May 4 - Emulex Corp.'s board of directors announced it has rejected an April 21 proposal from Broadcom Corp. to acquire Emulex for $9.25 per share in cash.

"After a thorough review of the proposal in consultation with our advisors, the board unanimously concluded that it is an opportunistic attempt by Broadcom to capture substantial current and long-term value that properly belongs to Emulex stockholders," Emulex chairman Paul F. Folino said in a company news release.

"As Broadcom is uniquely aware, Emulex has recently won tier-one original equipment manufacturer contracts at the expense of Broadcom and our other competitors, and as such, we are well positioned to gain share in this rapidly growing segment," Emulex president and chief executive officer Jim McCluney said in the release.

Emulex said in a letter to Broadcom that it believes Broadcom's offer "is clearly timed to take advantage of Emulex's depressed stock price during the current unprecedented macroeconomic conditions."

Broadcom said the total equity value of its offer is approximately $764 million and that the per-share offer price is a 40% premium above the closing price of Emulex common stock on April 20.

As previously reported, Emulex ended talks with Broadcom in January regarding a possible business combination, adopted a poison pill and amended its bylaws.

Broadcom previously announced it is filing suit in the Delaware Court of Chancery against Emulex and its board to declare invalid a portion of section 6.4 of Emulex's recently amended bylaws. In addition, Broadcom will ask the court to prevent Emulex from taking action to impede Broadcom's proposal or its efforts to acquire control of the Costa Mesa, Calif., storage networking company.

Irvine, Calif.-based Broadcom provides semiconductors for wired and wireless communications.

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