Broadcom launches hostile $764M bid for Emulex

Apr 21, 2009

(AP) -- Chip designer Broadcom Corp. is launching a $764 million hostile takeover offer for network gear maker Emulex Corp. Broadcom said Tuesday the deal would help it develop new technologies for corporate data centers.

The acquisition would amount to $9.25 per share, a 40 percent premium over Emulex's closing Monday.

A spokeswoman for Costa Mesa, Calif.-based Emulex did not immediately return a call requesting comment on the offer.

Meanwhile, Irvine-based Broadcom said it lost $92 million, or 19 cents per share, in the first quarter. That compares with a profit of $74 million, or 14 cents per share, in the year-earlier period.

Sales fell 17 percent to $853 million.

Analysts projected a profit of 3 cents per share on sales of $848 million, according to Thomson Reuters.

Broadcom shares tumbled $1.75, or 8 percent, to $20.04 in morning trading, while Emulex saw its stock surge $2.69, or 41 percent, to $9.30.

Broadcom said its unsolicited offer for Emulex, to be funded by cash and marketable securities, would help it develop technology aimed at streamlining computer networks by adding Emulex's expertise in equipment.

"Our combined entity can be a one-stop shop for key networking and storage technologies," Scott McGregor, Broadcom's chief executive, said in a statement.

McGregor said Broadcom approached Emulex about a possible deal in December. Emulex responded in early January, saying the company was not for sale and cutting off talks, according to a letter to Emulex's board released by Broadcom.

Emulex followed by writing a so-called "poison pill" into its bylaws in January. That step was intended to thwart a hostile takeover by giving existing shareholders the right to purchase more stock should any group or individual acquire more than 15 percent of outstanding shares.

Broadcom indicated it would try to get the provision removed. The company plans to ask a Delaware court to invalidate any "improper actions" meant to block Broadcom's takeover bid.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Square's point-of-sale service goes global

add to favorites email to friend print save as pdf

Related Stories

National Semiconductor to cut 1,725 jobs

Mar 11, 2009

(AP) -- Faced with a steep decline in sales, chip maker National Semiconductor Corp. said Wednesday it will eliminate more than one-quarter of its work force, or 1,725 jobs.

Adobe 1Q profit, sales drop, squeezed by downturn

Mar 17, 2009

(AP) -- Adobe Systems Inc., the company behind the popular Photoshop software, posted a decline in fiscal first-quarter profit and sales Tuesday, squeezed by the economic downturn.

TI profit, revenue tumble on shrinking demand (Update)

Apr 20, 2009

(AP) -- Texas Instruments Inc. said Monday that first-quarter profit and revenue tumbled as competition heightened and demand for its chips shrank amid the recession, but the results still beat the company's own expectations ...

RIM Profit Up Sharply, Says SEC Upgrades Probe

Apr 12, 2007

BlackBerry maker Research In Motion reports a sharply higher fourth-quarter profit, adding about a million subscribers and forecasting more growth for the upcoming quarter.

Recommended for you

Square's point-of-sale service goes global

3 hours ago

Financial services startup Square is taking aim at cash registers across the globe, making its point-of-sale software available internationally in English, Spanish, French and Japanese.

Apple, Xiaomi trade smartphone barbs in China

13 hours ago

Top executives from US technology giant Apple and Chinese smartphone upstart Xiaomi traded light-hearted barbs on Thursday at a Chinese Internet conference, acknowledging the fierce competition between the ...

Uber investigating if exec broke 'God' app rules

Nov 19, 2014

Uber Technologies confirmed Wednesday that it is investigating whether one of its general managers violated the popular car-booking service's privacy policies by snooping on a reporter's ride.

Showdown looms between US gov't, air bag maker

Nov 19, 2014

A showdown is looming between U.S. safety regulators and a Japanese company that makes air bags linked to multiple deaths and injuries. Car companies and the driving public are caught in the middle.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.