A shareholder advisory group has come out against a set of proposals by Irvine-based Broadcom Corp. that would make it easier to acquire Costa Mesa’s Emulex Corp.
San Francisco-based Glass Lewis & Co., which advises shareholders on issues put before, recommended against a mailing to Emulex shareholders by Broadcom.
Chipmaker Broadcom is seeking to acquire Emulex, a maker of electronics for data storage networks, for $764 million.
Emulex’s directors and executives have repeatedly rejected the offer in what’s an increasingly nasty hostile takeover bid.
Broadcom recently sent out a mailing to Emulex shareholders seeking a special meeting to consider proposals that would change Emulex’s bylaws to be more favorable to Broadcom.
The proposals are “merely in an effort to force an acquisition of (Emulex),” Glass Lewis said. “Broadcom has little interest in the long-term corporate governance of the company unless such changes support the dissident’s hostile takeover of the company.”
Broadcom responded that Glass Lewis’s conclusion “fundamentally misinterprets” its appeal to Emulex shareholders and that its offer “remains the best vehicle for Emulex shareholders to express their views.”
The report was a boost for Emulex, which has urged its shareholders to ignore Broadcom’s mailing and instead respond to its own mailing seeking investor input on the takeover drama.
Broadcom last week extended its offer to buy Emulex shares for a second time to July 1. About 3% of shareholders have sold their stocks to Broadcom.
Most Emulex shareholders have balked at the offer as they await a possible upped price by Broadcom and the results of the appeals sent to shareholders by both Broadcom and Emulex.
The takeover bid centers on a rivalry for customers for a new technology that promises to bring the speed and efficiency of special data storage networks to everyday networks of servers and desktop computers.
