Emulex Corp. shares surged Tuesday after chipmaker Broadcom Corp. made a $763.5 million unsolicited buyout offer.
Broadcom said Tuesday it sought talks with Emulex and its board in late December but was rejected by Emulex who said in early January that it was "not for sale and abruptly cut off the possibility of further discussions." Emulex shortly thereafter adopted a "poison pill" to prevent a takeover.
The offer breaks down to $9.25 cash per share of Emulex stock. Emulex stock was up almost 44 percent on the news on Tuesday, trading at $9.51, up from Monday's close of $6.61. Meanwhile, Broadcom shares fell 10 percent to $19.67 after the chipmaker separately posted a quarterly loss.
Broadcom said in a statement that the combined company would be able to advance the development of network conversion technologies.
"The logical evolution of the enterprise network is for a transition to a converged fabric architecture that incorporates a broad array of technologies. Our combined entity can be a one-stop shop for key networking and storage technologies for the enterprise and for our industry," Scott McGregor, president and chief executive officer of Broadcom, said in a statement.
Emulex said it would review the proposal with its financial advisors.
Also today, Broadcom reported a first-quarter loss of $92 million, or 19 cents a share, on revenues of $853.4 million. In the first quarter of 2008, the company earned $74 million, or 14 cents a share, on revenues of $1.03 billion.
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