Broadcom Raises Ante In Emulex Takeover Battle

Broadcom Corporation (NSDQ: BRCM) has raised its hostile bid for Emulex Corporation nearly 20% to $912 million and has indicated it will walk away from any deal if Emulex doesn't accept it.

Noting that its offer of $11 a share represents a premium of 66% to Emulex's closing price on the day Broadcom announced its initial offer in April, Broadcom said its offer also represents a 93% premium to the average closing price of Emulex stock for the 30 trading dates before the April offer.

"This is the best offer Broadcom intends to make," said Broadcom's Scott A. McGregor in a letter to Emulex's Paul Folino. "We believe combining our two companies will create significant value for our respective shareholders, employees, customers and partners 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."

McGregor is president and chief executive officer of Broadcom while Folino is executive chairman of Emulex's board of directors.

The danger for Emulex in rejecting the offer is that its stock price could drop.