Chip designer Broadcom Corp. has boosted its takeover offer for network gear maker Emulex Corp. to about $912 million from $764 million.
The original offer, which was made in April, amounted to $9.25 per share in cash. The new bid made late Monday raises that amount to $11 per share. The new offer represents a premium of 66.4 percent over its closing price April 20, the day before the first offer was made, and is a 1 percent premium to Emulex's ending price on Monday.
Emulex said it will review the revised offer and its board will make a recommendation in due time. It advised stockholders against taking any action right now.
Broadcom has said that the proposed deal would help it develop new technologies for corporate data centers. The company had initially approached Emulex about a possible acquisition in December 2008. Emulex responded in early January, saying that it was not for sale and cutting off talks, according to a letter to Emulex's board that was previously released by Broadcom.
Emulex followed by writing a so-called "poison pill" into its bylaws in January in an attempt to thwart any possible takeover attempts. Broadcom said at the time that it would try to get the provision removed. On Monday Broadcom said it would stop soliciting consents from Emulex shareholders to amend the company's bylaws and to hold a special shareholders meeting in an effort to engaged Emulex in a "friendly and timely transaction."
Broadcom also instructed its Delaware legal team to dismiss a lawsuit challenging the validity of Emulex's supermajority voting bylaw and its "poison pill."
Broadcom's initial offer of $9.25 per share attracted a low response, with less than 3 percent of shares tendered by the bid's original deadline on June 17. Broadcom extended its tender offer to July 1 and sought support for an amendment that would allow stockholders representing 10 percent of outstanding shares to call a special meeting, which it has now dropped. Costa Mesa, Calif.-based Emulex rejected the proposal at the time, accusing Broadcom of attempting to oust its board.
With the new $11 per share offer, Broadcom has now extended its tender offer until July 14.
Broadcom said the new bid was the best offer it planned to make.
Shares of Broadcom fell 12 cents to close at $24.79 Tuesday, while Emulex's stock dropped $1.10, or 10.1 percent, to $9.78.
