Broadcom Still Trying to Woo Emulex Shareholders
Broadcom turned up the heat Wednesday in its attempt to convince Emulex shareholders to allow Broadcom to purchase the company, as the chance of an amicable outcome to its unsolicited takeover bid appeared even more remote.
Broadcom again asked Emulex's shareholders to approve a proposal that would allow them to present their views on the merger at a special meeting. Emulex's board of directors has rejected Broadcom's offer to buy the company for US$9.25 per share.
Broadcom also presented a new analysis that it said shows its all-cash offer of about $764 million would be more advantageous for shareholders than leaving Emulex as a standalone company.
Broadcom presented its case in papers filed with the U.S. Securities and Exchange Commission and posted on its Web site.
"Our proposals in the Consent Solicitation would give Emulex stockholders the ability to be heard in the most important matters affecting their investment," Broadcom President and CEO Scott McGregor said in a statement. "Contrary to misleading statements by Emulex about our proposals, support for the consent solicitation does not obligate Emulex stockholders to tender their shares to Broadcom or to elect new Board members."
Emulex did not immediately reply to request for comment Wednesday.
Broadcom's renewed pressure comes after Emulex filed suit against Broadcom on Monday for unfair business practices, citing the drug-trafficking and securities-fraud indictment of Broadcom's former top executive, among other things, as proof to its shareholders that Broadcom officials can't be trusted.
Emulex has been fighting off a takeover by Broadcom since late last year, when Broadcom first approached Emulex about a deal.
Broadcom made its bid public in a letter to Emulex shareholders on April 21, following a breakdown of talks in January. Emulex's board rejected the bid, saying it undervalued the company, leading Broadcom to make its tender offer to Emulex shareholders on May 15.
Broadcom produces semiconductors used mainly in communications products, such as wireless networks, cell phones and cable set-top boxes. Emulex provides technology for connecting storage, servers and networks in data centers, working with large storage vendors such as EMC, Hewlett-Packard and IBM. Both companies operate in Orange County, California -- Emulex in Costa Mesa and Broadcom in Irvine.