Broadcom proposes acquiring Emulex stock for $9.25 per share in cash

By Lisa Kerner

Charlotte, N.C., April 21 - Broadcom Corp. offered to buy all the outstanding shares of Emulex Corp. common stock for $9.25 per share in cash, it was announced on Tuesday.

Total equity value of the offer is approximately $764 million, according to a Broadcom news release.

Broadcom said the per-share offer price is a 40% premium above the closing price of Emulex common stock on April 20.

Emulex acknowledged receipt of the unsolicited proposal from Broadcom. The company said its board will review the offer with the assistance of Goldman, Sachs & Co. and its legal adviser, Gibson, Dunn & Crutcher LLP.

According to Broadcom, it will fund the offer from its approximately $2 billion of existing cash and marketable securities on hand.

"A combination of Broadcom and Emulex addresses our customers' growing need to apply the economics of Ethernet to the Fibre Channel storage space to achieve low-cost network converged solutions," Scott A. McGregor, president and chief executive officer of Broadcom, said in a company news release.

"Our preference is to proceed in a friendly, collaborative manner, and we hope that Emulex's board will see the merits of this combination and appreciate the substantial value being offered to its shareholders."

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

Broadcom said 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.

Banc of America Securities is advising Broadcom, an Irvine, Calif.-based provider of semiconductors for wired and wireless communications.

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