Starboard calls Emulex "extremely undervalued", seeks new board
Sept 16 (Reuters) - Activist hedge fund Starboard Value LP said network equipment maker Emulex Corp was "extremely undervalued" and called for reconstituting the board to include shareholder advocates.
Starboard said it owns about 7.9 percent of Emulex's stock, up from the 6.9 percent it first reported in July.
A new board consisting of independent directors and shareholder advocates should be able to evaluate each of Emulex's businesses with a fresh perspective and determine the right strategy to enhance shareholder value, Starboard managing member Peter Feld said in a letter on Monday.
Emulex was not immediately available for comment.
The company appointed Chief Operating Officer Jeffrey Benck as chief executive in July, after the then CEO James McCluney was named the chairman. ()
Starboard joined another major shareholder, Altai Capital, in questioning Emulex's decision to buy New Zealand-based Endace Ltd, and called it "a poorly timed acquisition".
Emulex acquired Endace for about $130 million in cash in December.
Altai, which owned about 6 percent stake as of June, has been urging Emulex to sell itself.
Bloomberg in July said Emulex has hired Goldman Sachs Group Inc to seek potential buyers, quoting two people with knowledge of the situation.
Another activist shareholder, Elliott International Capital Advisors, held about 10 percent stake in Emulex as of August end.
Shares of Emulex rose 4 percent to $8.07 on the New York Stock Exchange. They have risen about 6 percent since the beginning of the year, but are trading at about half their 2010 value.
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