Broadcom begins tender offer despite rejection by Emulex's board

By Lisa Kerner

Charlotte, N.C., May 5 - Broadcom Corp. said its subsidiary, Fiji Acquisition Corp., began a $9.25-per-share cash tender offer for all the outstanding shares of Emulex Corp. on Tuesday.

The offer, which is not conditioned on financing, is slated to end at midnight ET on June 3, according to a Broadcom news release.

Emulex announced on Monday that its board of directors rejected what it considered to be an opportunistic offer by Broadcom to acquire Emulex for $9.25 per share.

"The Emulex board's response on Monday and its continued unwillingness to engage in discussions with Broadcom are clearly not in the best interests of either its stockholders or its customers," Broadcom president and chief executive officer Scott A. McGregor said in a company news release.

"This intransigence could cause needless delay in efforts to combine our two companies, leading to further deterioration of Emulex's market share and stockholder value," McGregor said.

Broadcom said it has also filed a preliminary consent solicitation statement to amend Emulex's bylaws to allow stockholders to call a special meeting of stockholders.

According to McGregor, Emulex, by adopting a poison pill and imposing bylaw amendments, has erected "barriers to stockholders' ability to express their will as owners of Emulex."

McGregor said Broadcom was left with no choice but to ask Emulex stockholders to call for a special meeting "so that they can consider the merits of our offer for themselves."

Emulex said it will review Broadcom's consent solicitation and urged shareholders not to take any action on it at this time. The Emulex board will make its recommendation on the tender offer and respond to the consent solicitation "in due course," according to a statement released by the company on Tuesday.

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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