Broadcom boosts hostile takeover offer for Emulex
IRVINE, Calif. (AP) – Chip designer Broadcom Corp. has boosted its hostile takeover offer for network gear-maker Emulex Corp. to about $912 million from $764 million.
The original offer, which was made in April, amounted to $9.25 per share in cash. The new bid made late Monday raises that amount to $11 per share. The new offer is a 1 percent premium to Emulex's closing stock price on Monday.
Emulex said it will review the revised offer and its board will make a recommendation in due time. It advised stockholders against taking any action right now.
Broadcom has said that the proposed deal would help it develop new technologies for corporate data centers. The company had initially approached Emulex about a possible acquisition in December 2008. Emulex responded in early January, saying that it was not for sale and cutting off talks, according to a letter to Emulex's board that was previously released by Broadcom.
Emulex followed by writing a so-called "poison pill" into its bylaws in January in an attempt to thwart any possible takeover attempts. Broadcom said at the time that it would try to get the provision removed.
Broadcom's initial offer of $9.25 per share attracted a low response, with less than 3 percent of shares tendered by the bid's original deadline on June 17. Broadcom extended its tender offer to July 1 and sought support for an amendment that would allow stockholders representing 10 percent of outstanding shares to call a special meeting. Costa Mesa, Calif.-based Emulex rejected the proposal, accusing Broadcom of attempting to oust its board.
With the new $11 per share offer, Broadcom has now extended its tender offer until July 14.
Broadcom said the new bid was the best offer it planned to make.