Irvine chipmaker Broadcom Corp. has extended for a second time its offer to acquire Costa Mesa’s Emulex Corp.
The company’s latest $764 million bid to buy Emulex, a maker of electronics for data storage networks, expired on Wednesday with Broadcom acquiring only about 2.7% of Emulex’s outstanding shares.
The offer now is good through July 1 and could be extended again.
In early June, Broadcom first extended its buyout offer by two weeks
Most Emulex shareholders have balked at the offer as they await a possible upped price by Broadcom and recent appeals sent to shareholders by both Broadcom and Emulex.
The takeover drama has become heated after Emulex’s management has rejected Broadcom’s offer several times, calling it too low and “opportunistic.”
On Thursday, Emulex reiterated its stance.
“We believe stockholders agree with our board that Broadcom’s offer signficantly undervalues Emulex, as evidenced by the meager less than three percent of outstanding shares tendered into the offer and the fact that the stock has continuously traded well above Broadcom’s offer since its announcement,” the company said in a statement. “We continue to strongly recommend against Broadcom’s offer.”
Broadcom has blasted back by saying its offer is fair based on Emulex’s poor performance in recent quarters.
The fighting has spilled over into a series of legal spats with three lawsuits at latest count.
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.
Broadcom again hinted it walk away from Emulex in its bid to go after converged networks.
“While this is only one of several paths toward the network convergence opportunities that are over the horizon, we continue to believe a combination with Emulex would give everyone,customers, employees and stockholders of both companies,the best way to accelerate network convergence over the long term and deliver meaningful value in the near term,” Broadcom Chief Executive Scott McGregor said in a statement.
Both companies now are in a waiting game until they hear back from Emulex’s shareholders on recent mailings.
Broadcom is seeking what’s called a “consent solicitation,” in which Emulex shareholders give the green light to call a special meeting to discuss the buyout bid and other proposals that would change Emulex’s bylaws to be more favorable to Broadcom.
Emulex has its own shareholder solicitation to gauge shareholder sentiment.
Broadcom needs more than 67% of shareholders to give consent to a special meeting to consider the deal and changes Emulex’s board.
That number could drop to 50% if Broadcom succeeds in winning a Delaware lawsuit against Emulex.
