Let's get right to the point with this, because the ongoing war of words between chipmaker Emulex Corp. (NYSE:ELX) and its hostile suitor Broadcom Corp. (NASDAQ:BRCM) isn't likely to end anytime soon. Broadcom, which launched a hostile, $764 million tender offer for Emulex May 5, Wednesday responded to
accusations by its unwilling target of misleading and disparaging statements.
Here's what Broadcom had to say:
"We urge Emulex shareholders to remain focused on the central issue: that they deserve the right--which the Emulex board of directors would deny them--to decide for themselves what they think of Broadcom's all cash, $9.25 per share offer. Although Emulex dismisses its recent, declining revenue as "not relevant" to its future prospects, Broadcom believes past performance is indeed relevant to any shareholder who wants to assess the credibility of Emulex's newly unveiled, hockey-stick financial projections. Emulex's market share has been stuck on hold for years; it has admitted publicly that it needs to do a better job of converting design wins to revenue; and its stock has underperformed for most of the past seven years. In contrast, a combination with Broadcom, which has a superior track record of performance, would create a far stronger company, better positioned to serve customers and create opportunity for employees--while delivering immediate value to Emulex shareholders."
Broadcom went on to say that Emulex shareholders should support its consent solicitation that would enable a special meeting of shareholders. Emulex had described the consent as a move that "aims to ultimately remove Emulex's entire Board and
appoint in its place nominees hand-picked by Broadcom."
- Olaf de Senerpont Domis
Continue reading below
