Broadcom drops bid for Emulex - CIOL News Reports

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Broadcom drops bid for Emulex

The IC firm had in the past made a variety of offers to acquire Emulex

Friday, July 10, 2009

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SAN JOSE, USA: Irvine-based communication IC vendor Broadcom Corp has put on the backburner its plans to buy out networking company Emulex Corp.

The IC firm had in the past made a variety of offers to acquire Emulex.

Broadcom, which had earlier made an all-cash $11-per-share offer, has said that it was the best offer it could make, adding that it will allow its previously announced tender offer for Emulex stock to expire on July 14.

Last April the company had made an unsolicited bid to purchase Emulex for $9.25 per share in cash or $764 million. The bid came would have brought good tidings for Broadcom as the acquisition would have propelled the company on to big league and a top slot in the market for Ethernet chips for servers at the Gbit generation.

Though the company has this facility, the acquisition would have meant that shipping Fibre Channel chips or software or board-level products of any kind would have been easier, because Emulex has all the three features.

However, Emulex ignored the bid making Broadcom go in for more offers. Emulex rejected those bids as well, a report added.

"We unanimously believe Emulex will deliver significantly more value than Broadcom's revised offer through the company's rapidly developing converged networking business and solid execution in our host server and embedded storage markets," said Emulex executive chairman Paul Folino.

Broadcom had, on April 21, offered to pay $9.25 per share for Emulex, and also clarified that it would terminate an earlier lawsuit against Emulex.

Broadcom also said that it would stop soliciting shareholders to change the company's bylaws, a move it initiated after encountering stiff management opposition to the acquisition offer. Nothing seems to have worked out. Broadcom sees the plans not working out forcing it to drop the offer.

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