Emulex board advises shareholders to reject Broadcom's tender offer

By Lisa Kerner

Charlotte, N.C., May 15 - Emulex Corp.'s board of directors unanimously recommended that the company's stockholders reject Broadcom Corp.'s $9.25-per-share cash tender offer and related consent solicitation, it was announced on Friday.

Broadcom began its tender offer for Emulex on May 5.

The offer is slated to end at midnight ET on June 3.

According to the board, Broadcom's offer "significantly undervalues Emulex's long-term prospects and is grossly inadequate."

Broadcom's offer is also "opportunistic," given that Broadcom knew of "significant new non-public design wins by Emulex in converged networking prior to making its proposal on April 21."

Emulex said the highly conditional offer is funded in part by Emulex's own cash, resulting in Broadcom offering only $5.59 per share for the operations of Emulex.

As previously reported, Broadcom filed a preliminary consent solicitation statement to amend Emulex's bylaws to allow stockholders to call a special meeting of stockholders.

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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