Broadcom has raised its cash tender offer for Emulex to $912m in an effort to sweeten the previously announced takeover bid. It has increased its cash bid from $9.25 to $11 per share, and said that it will extend its tender offer as required by law for an additional 10 business days to 14th July.
The company urged Emulex to support the negotiated transaction; it said that the offer represented a premium of 66% to Emulex’s closing stock price on April 20, 2009, the day before the company announced its initial offer.
Scott McGregor, president and chief executive officer of Broadcom has sent the letter to Emulex’s Board of Directors in which he asked the company to complete the transaction on a friendly and expedited basis.
He said: “Delay – and its associated business risks and financial costs – erode the value of a combination. This is especially so because Broadcom has other value-creating opportunities. We believe it is in the interest of each company’s stakeholders to complete a transaction expeditiously or to conclude that we cannot, and move on.”
Broadcom has stated that it will cease soliciting consents from Emulex’s stockholders to amend Emulex’s bylaws and to hold a special meeting with shareholders. The company will also dismiss the lawsuit challenging the validity of Emulex’s supermajority voting bylaw and its poison pill anti-takeover device.
In response, Emulex said that it will review the terms of the revised tender offer and will make its recommendation to the stockholders in due course.
Earlier in May, Emulex rejected Broadcom’s bid and has also sent a letter to its stockholders urging them not to tender their shares into the unsolicited, non-binding $9.25 per share tender offer.
