COSTA MESA, USA: Emulex Corp. announced that its Board of Directors, with the assistance of its financial and legal advisors, has completed its evaluation of the unsolicited, non-binding proposal received on April 21, 2009 from Broadcom Corp. to acquire Emulex for $9.25 per share in cash and has unanimously determined that the Broadcom proposal significantly undervalues Emulex and is not in the best interest of Emulex stockholders.
Paul F. Folino, Executive Chairman of the Board of Emulex, said: "After a thorough review of the proposal in consultation with our advisors, the Board unanimously concluded that it is an opportunistic attempt by Broadcom to capture substantial current and long-term value that properly belongs to Emulex stockholders. The Board is very enthusiastic about Emulex's future prospects and the long-term value we expect to deliver through the Company's current strategy."
Jim McCluney, President and Chief Executive Officer of Emulex, added: "In addition to our leadership position in the host server and embedded storage markets, Emulex is also quickly becoming the premier provider of converged networking for the enterprise. As Broadcom is uniquely aware, Emulex has recently won tier-one original equipment manufacturer (OEM) contracts at the expense of Broadcom and our other competitors, and as such, we are well positioned to gain share in this rapidly growing segment. We look forward to continuing to execute on our strategy to create significant value for stockholders and customers over the long-term."
In a letter to Broadcom, the Emulex Board of Directors stated that Broadcom's unsolicited proposal is not in the best interests of Emulex stockholders because it:
* Significantly undervalues Emulex's long-term prospects, particularly with respect to our opportunities in network convergence, which are more than doubling Emulex's addressable market;
* Is opportunistic given Broadcom is aware of significant new unannounced design wins that Emulex has secured with tier-one OEMs, at the expense of Broadcom and other competitors, and their potential long-term value creation for Emulex and its stockholders;
* Is clearly timed to take advantage of Emulex's depressed stock price during the current unprecedented macroeconomic conditions. Emulex's stock price has traded well above the proposal price within the last 12 months.