Foundry Networks dividend contingent on merger with Brocade, sale of auction-rate securities

By Lisa Kerner

Charlotte, N.C., Dec. 8 - Foundry Networks, Inc. will pay the previously announced dividend to Foundry shareholders immediately prior to completing its merger with a wholly owned subsidiary of Brocade Communications Systems, Inc.

According to Foundry, its stockholders will receive the net proceeds of the sale of the company's portfolio of auction-rate securities, up to approximately $50 million, if Foundry successfully liquidates the portfolio prior to the completion of the merger.

Houlihan Lokey Howard & Zukin Capital, Inc. is assisting with the sale of the securities.

The dividend is payable only if the merger is completed, a Foundry news release said.

Foundry will hold a special meeting of stockholders on Dec. 17 for the purpose of approving the merger.

Brocade and Foundry said they expect to close the deal by the end of the year.

As previously reported, Foundry shareholders will receive $16.50 per share under the company's amended definitive agreement with Brocade. The transaction is valued at approximately $2.6 billion.

Brocade, a San Jose, Calif., network storage equipment company, originally agreed to acquire Foundry for $3 billion, or $18.50 in cash plus 0.0907 Brocade shares for each share of Foundry common stock.

Foundry is a Santa Clara, Calif.-based provider of network switching and routing.

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