Emulex Seeks To Deflect Broadcom's Hostile Takeover update from June 2009

Broadcom's bid to acquire Emulex, already a nasty event, has taken a turn deeper into hostile territory.

Emulex on Monday filed a lawsuit against Broadcom, charging the latter company hasn't sought to disclose more information on two former executives who have been indicted.

The lawsuit is just the latest chapter in Broadcom's attempt to acquire Emulex. Broadcom has said its $764 million takeover offer would enable it to offer its Ethernet offerings along with Emulex's Fibre Channel storage networking offerings to enterprise networks. Emulex, which maintains that the Broadcom offer significantly undervalues Emulex, has said it has been rapidly expanding its presence in network convergence markets and doesn't need Broadcom to succeed.

In the lawsuit, Emulex points to the positions of former Broadcom chief executive Henry T. Nicholas III and Broadcom co-founder Henry Samueli while they were high-ranking executives at the company. Nicholas, who left Broadcom in 2003, and Samueli have been charged by prosecutors with various unlawful actions. They have denied the charges leveled against them.

In its effort to influence its stockholders to reject the Broadcom bid, Emulex utilized the lawsuit to drag up older events at Broadcom that occurred when Nicholas and Samueli had important positions at the top of the company. The lawsuit charges: "It is material for stockholders and employees of Emulex to understand that they are not dealing with an honest enterprise."

Broadcom has responded by saying that Emulex stockholders "deserve better than mudslinging and scorched-earth tactics designed to block shareholders from their ability to accept our offer."

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