One day after the Board of Directors of Emulex rejected its acquisition bid, Broadcom launched a tender offer for all the outstanding shares of common stock of the company.
Broadcom is offering $9.25 net per share in cash (less any applicable withholding taxes and without interest). This represents a total equity value of approximately $764 million. The offer represents a 62-percent premium to Emulex’s average closing stock price for the 30 trading days immediately prior to Broadcom’s public offer on April 21, 2009; and a 42-percent premium over the median 12-month stock price target published by research analysts as of April 20, 2009.
Scott A. McGregor, President and Chief Executive Officer of Broadcom, said “We are disappointed by Emulex Corporation’s rejection of Broadcom’s proposal which would deliver substantial, immediate and highly certain value to Emulex’s stockholders, while further providing significant benefits to customers and employees alike. The Emulex Board’s response on Monday and its continued unwillingness to engage in discussions with Broadcom are clearly not in the best interests of either its stockholders or its customers. This intransigence could cause needless delay in efforts to combine our two companies, leading to further deterioration of Emulex’s market share and stockholder value.”
“Emulex’s Board has taken steps, including the adoption of a ‘poison pill’ and the imposition of bylaw amendments, to erect barriers to stockholders’ ability to express their will as owners of Emulex,” continued Mr. McGregor. “While we much prefer to arrive at a negotiated agreement with Emulex, the Emulex Board has left us with no choice but to ask Emulex stockholders to call for a special meeting of stockholders so that they can consider the merits of our offer for themselves.”http://www.broadcom.com
