Feeds

Broadcom raises Emulex bid

Madame, will you talk?

High performance access to file storage

Broadcom has gone ahead and raised its $9.25/share all-cash Emulex bid to $11.00/share, the upper end of the expected range.

It has extended its tender offer for an additional 10 business days, until midnight July 14, 2009. Broadcom now values Emulex at $912m to be precise, up from the previous $764m valuation, meaning it is prepared to spend an additional $148m over its orginal bid to buy the company.

Broadcom, a supplier of Ethernet switches and chips, wants Emulex for its Fibre Channel over Ethernet (FCOE) technology which can be added to its chip product line, enabling its customers to capitalise on a growing trend to converge server edge networking for both Fibre Channel storage and Ethernet onto an Ethernet platform. Storage array edge networking may also move away from Fibre Channel to FCOE, necessitating the use of FCOE-capable Ethernet technology.

So far in the hostile bidding war Emulex has impugned the reputation of Broadcom and persistently said its bid undervalues the company. Broadcom has said Emulex' management has significantly under-performed and failed to capitalise on technology advances. It had wanted to force an Emulex shareholder meeting, via a consent solicitation, which could expose the incumbent Emulex board to replacement. Broadcom had also instituted a legal action to sweep away an Emulex poison pill defence against unwanted takeover bids.

The president and CEO of Broadcom, Scott McGregor, sent a public letter to the Emulex board and Paul Folino, its executive chairman, in which he wrote that Broadcom has terminated its attempts to get a consent solicitation for a special stockholder meeting.

The letter also said: "We have instructed our Delaware counsel to dismiss the lawsuit in which we challenged the validity of Emulex's supermajority voting bylaw and its "poison pill" anti-takeover device."

Both of these things should clear the air for any talks.

The letter closed on a fairly friendly note, saying: "Paul, if we move quickly to combine our two companies with the speed required by market dynamics, great value can be delivered now to your shareholders and future opportunities created for ours. If not, we believe it is only prudent for Broadcom to consider other alternatives."

There was also the implied hint that more money mght be forthcoming, as the raised bid is described by McGregor thus: "Based on our assessment of the information we have and that is publicly available about Emulex, this proposal represents the best offer we can make based on an expedited transaction."

Emulex' board did not immediately reject the Broadcom bid. Instead it issued a statement saying that, in line with its fiduciary duty, it would review Broadcom's bid and issue a recommendation in due course.

Emulex shares closed yesterday at $10.88, suggesting that the market does not expect a higher bid. ®

High performance access to file storage

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
European Court of Justice rips up Data Retention Directive
Rules 'interfering' measure to be 'invalid'
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
Bored with trading oil and gold? Why not flog some CLOUD servers?
Chicago Mercantile Exchange plans cloud spot exchange
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
IT bods: How long does it take YOU to train up on new tech?
I'll leave my arrays to do the hard work, if you don't mind
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.