Broadcom's bid for Emulex special meeting not backed by proxy firm

By Lisa Kerner

Charlotte, N.C., June 24 - Proxy Governance, Inc. recommended against Broadcom Corp.'s request for a special meeting to replace the board of directors of Emulex Corp., according to an Emulex news release.

Emulex urged its stockholders to use the white proxy card to revoke consent on all Broadcom proposals.

Broadcom's proposal to call a special meeting, according to the proxy advisory firm, "is part of a larger strategy by a potential strategic acquirer to complete an acquisition of the company at a price the board has already rejected as undervalued, and which is currently significantly below the market price for the company's shares," Emulex said.

According to Emulex, Proxy Governance said in its report that an "unsolicited buyout offer does not obligate a board to sell the company at a discount."

Broadcom is seeking to acquire Emulex for $9.25 per share. Emulex shares closed at $10.67 (NYSE: ELX) on Wednesday.

"We see no benefit for stockholders to give Broadcom, an owner of just 100 Emulex shares, a special meeting when our annual meeting on November 19 will provide a truly open forum for stockholders to express their views and vote on our entire board," Emulex president and chief executive officer Jim McCluney said in the release.

McCluney disagreed with Proxy Governance's support of Broadcom's proposal one, which allows stockholders to call a special meeting with the support of 10% of the outstanding shares.

In a statement on Wednesday, Broadcom president and chief executive officer Scott A. McGregor said, "Proxy Governance's recommendation today in favor of the right of shareholders to hold a special meeting is a positive development that shifts the leverage away from Emulex's insular board, and reinforces our view that Emulex shareholders should be given the right to make their voices heard at a special meeting of shareholders."

Proxy Governance rejected four and Glass, Lewis & Co. rejected all five of Broadcom's consent solicitation proposals, the Emulex release said.

As previously reported, Broadcom extended its tender offer for Emulex to 11:59 p.m. ET on July 1 from June 17.

The offer was previously extended to June 17 from June 3.

"We continue to urge stockholders to reject Broadcom's consent solicitation and tender offer," McCluney said.

Approximately 2,253,814 shares of Emulex had been tendered and not withdrawn in the offer as of 5 p.m. ET on June 17, Broadcom said.

Broadcom said it is prepared to complete a transaction quickly and that it favors collaborative discussions with Emulex.

Emulex is a Costa Mesa, Calif., storage networking company.

Irvine, Calif.-based Broadcom provides semiconductors for wired and wireless communications.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.