Last we heard, shareholders of Foundry Networks Inc. [FDRY] were scheduled to vote Wednesday at 7 p.m. EDT on the $3 billion acquisition of the company by Brocade Communications Systems Inc. [BRCD]. But following days of confusion after the unexpected delay of the vote that had originally been scheduled for Oct. 24, many expect another, potentially longer delay.
As the two companies remain silent on the reason for the postponement, a host of theories have circulated, centering on everything from a simple housekeeping matter to an effort by Foundry's management to back out of the deal. Some shareholders and analysts also suspect that one or both companies may be interested in changing the terms of the deal, and possibly reducing the price Brocade pays for Foundry.
"As we know it now, we are voting at four (Pacific Daylight Time), and the vote is for the deal as we know it," one Foundry shareholder said of the $3 billion cash-and-stock deal, which was valued at $19.25 per share when it was first announced in July. "But my guess is that the price gets cut and the vote is put off for a couple more weeks."
Although many Foundry shareholders, fearful of a steep drop in their stock value if the deal collapses, say they would prefer to see the deal price cut rather than the deal abandoned altogether, it's not at all clear that the companies' are contemplating such a move. "I'm operating in a vacuum," said one analyst who follows Foundry. "It is still a mystery as to why they postponed the vote in the first place."
A spokesman for Brocade echoed that sentiment, noting, "I know as much as you do in that it's [the vote] scheduled to take place later today." - Andrea Orr
See Oct. 28 post on Brocade and Foundry from Tech Confidential
See Oct. 24 announcement on delayed shareholder vote from Foundry Networks
See July 22 post on Brocade/Foundry deal from Tech Confidential
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