Emulex:Glass Lewis Says Holders Should Shun Broadcom Proposals

Emulex Corp. (ELX), facing a $9.25-a-share hostile takeover offer from Broadcom Corp. (BRCM), said Monday proxy advisor Glass Lewis & Co. recommended that stockholders reject Broadcom's consent solicitation calling for an investor meeting to vote on a new slate of directors.

Emulex said Glass Lewis recommended investors reject all five of Broadcom's proposals, as the reforms were submitted "merely in an effort to force an acquisition of the company."

The proxy advisor added that it "finds no reason to believe that Emulex's board has not acted in the best interests of shareholders," according to Emulex.

Glass Lewis representatives didn't immediately return a call seeking comment.

Broadcom questioned Glass Lewis's interpretation of the proposals, saying that Glass Lewis made an initial recommendation that shareholders support two of Broadcom's proposals.

Broadcom offered what it said was Glass Lewis's initial recommendation: "Though the intent of this proposal is to call a special meeting at which the board may be replaced, we note that shareholders are not being asked to consider such a replacement at this time. As such, we believe shareholders should consent to this proposal."

Broadcom's attempted takeover of storage networking firm Emulex has become increasingly nasty, with both sides attacking each other's motives and initiating lawsuits.

However, Emulex shares have consistently traded above the $9.25 offer price, leading few stockholders to tender shares to Broadcom when a better price is available on the open market. As of June 17, less than 3% of Emulex shares were tendered.

"We appreciate the broad support we have received from stockholders on the Board's recommendation against Broadcom's offer," said Emulex Chief Executive Jim McCluney in a statement.

Emulex shares were recently down 2% to $10.83. Broadcom fell 1.3% to $25.16.

-By Jerry A. DiColo; Dow Jones Newswires; 212-416-2155; [e-mail]