Broadcom Raises Ante In Emulex Takeover Battle update from June 2009

Broadcom Corporation has raised its hostile bid for Emulex Corporation nearly 20% to $912 million and has indicated it will walk away from any deal if Emulex doesn't accept it.

Noting that its offer of $11 a share represents a premium of 66% to Emulex's closing price on the day Broadcom announced its initial offer in April, Broadcom said its offer also represents a 93% premium to the average closing price of Emulex stock for the 30 trading dates before the April offer.

"This is the best offer Broadcom intends to make," said Broadcom's Scott A. McGregor in a letter to Emulex's Paul Folino. "We believe combining our two companies will create significant value for our respective shareholders, employees, customers and partners We believe it is in the interest of each company's stakeholders to complete a transaction expeditiously or to conclude that we cannot, and move on."

McGregor is president and chief executive officer of Broadcom while Folino is executive chairman of Emulex's board of directors.

The danger for Emulex in rejecting the offer is that its stock price could drop.

In a statement, Emulex said it will review Broadcom's latest offer and added that it urged its shareholders to take no action at the present time.

Broadcom has said an acquisition of Emulex and its Fibre Channel storage networking solutions would be a good fit with Broadcom's Ethernet offerings. Earlier, McGregor praised Emulex product mix including its expertise in storage, ost bus adaptors and diversified channels. Both firms are headquartered in Orange County, California.

Broadcom began negotiating with Emulex about an acquisition in December and Broadcom announced its acquisition intentions publically in April. The deliberations became increasingly hostile as lawsuits were filed by both sides and Emulex dragged dated Broadcom executive indiscretions into the situation. Emulex maintained that its future products were solid and the company planned to thrive on its own in the future.

Broadcom indicated that it will drop its offer July 14. In his latter McGregor said: "We intend to allow our offer to expire at the end of that period if the Emulex Board has not at that time indicted its support for the transaction that we have proposed."

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