Foundry Networks amends agreement with Brocade Communications, reschedules special meeting

By Lisa Kerner

Charlotte, N.C., Nov. 7 - Foundry Networks, Inc. shareholders will receive $16.50 per share under the company's amended definitive agreement with Brocade Communications Systems, Inc., it was announced on Friday.

Brocade had agreed in principle to acquire Foundry for $16.50 per share, or approximately $2.6 billion, it was previously reported.

Both companies' boards of directors unanimously approved the amended agreement.

Foundry stockholders may also receive the proceeds from the sale of the company's portfolio of auction-rate securities, which could be up to approximately $50 million if the company liquidates the portfolio close to the acquisition, a Foundry news release said.

Brocade said it plans to use various financing sources to fund the transaction, including cash on hand at both companies and the net proceeds from a $1.1 billion term loan facility.

Foundry said it will hold a special meeting of stockholders in December for the purpose of approving the transaction. The company's Nov. 7 meeting was cancelled.

Brocade, a San Jose, Calif., network storage equipment company, originally agreed to acquire Foundry for $3 billion, or $18.50 in cash plus 0.0907 Brocade shares for each share of Foundry common stock.

Foundry is a Santa Clara, Calif.-based provider of network switching and routing.

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