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 This material may not be published, broadcast, rewritten or redistributed.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: Amazon launches 3D printing store

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

Chinese smartphone makers win as market swells

7 hours ago

Chinese smartphone makers racked up big gains as the global market for Internet-linked handsets grew to record levels in the second quarter, International Data Corp said Tuesday.

Full appeals court upholds labels on meat packages

7 hours ago

(AP)—A federal appeals court has upheld new government rules that require labels on packaged steaks, ribs and other cuts of meat to say where the animals were born, raised and slaughtered.

BlackBerry buys German anti-eavesdropping firm

8 hours ago

Canadian smartphone maker BlackBerry announced Tuesday the purchase of German voice and data encryption and anti-eavesdropping firm Secusmart, whose customers include NATO and German Chancellor Angela Merkel ...

India's Flipkart raises $1 bn to tackle Amazon

10 hours ago

India's top e-commerce company Flipkart said Tuesday it had raised $1 billion (60 billion rupees) in funds as it battles US giant Amazon for supremacy in the hyper-competitive local market.

User comments : 0