Delaware judge postpones Emulex investor trial
By Martha Graybow
NEW YORK, July 6 (Reuters) - A Delaware judge on Monday postponed a trial in an investor lawsuit challenging anti-takeover defenses erected by storage technology company Emulex Corp (ELX.N) as it considers a buyout bid from Broadcom Corp (BRCM.O).
Vice Chancellor Leo Strine of Delaware Chancery Court made the decision before the expected Wednesday start of the trial, saying he was not ruling out an eventual trial, but wanted to "let the dust settle" for now.
Broadcom, a wireless chipmaker, raised its cash bid for Emulex last week to $912 million, or $11 a share, up from $764 million, or $9.25 a share, and extended its tender offer to July 14.
It also changed the tenor of its previously hostile bid and dropped a lawsuit challenging Emulex's "poison pill" anti-takeover device and "supermajority" voting requirement to repeal bylaws changes.
After Broadcom raised its bid, Emulex said it planned to review it and make recommendations to shareholders. It had requested the Delaware trial be postponed while it considers the Broadcom offer.
"We will know by the end of next week, probably, whether there is going to be a deal or not," Strine said in a conference with lawyers in the case, according to a transcript of the proceedings.
"If there is not going to be a deal, we can all get back together and talk about how we conclude this case," he said.
The shareholder lawsuit was brought by investor Reid Middleton, who contends that the company's board of directors is trying to entrench itself and that the anti-takeover devices should be withdrawn.
"We're disappointed by the postponement of the trial, because it's time for the shareholders themselves to decide whether they want to risk Emulex's future with the current board rather than taking Broadcom's cash offer today," said Mark Lebovitch, Middleton's attorney.
But Lebovitch added he was pleased that the Emulex board could have to answer claims for money damages by shareholders if the board "continues to put its self-interest ahead of shareholder welfare."
Lebovitch, a partner at law firm Bernstein Litowitz Berger & Grossmann LLP, is Middleton's lead attorney along with law firm Grant & Eisenhofer PA.
Emulex spokesman Andrew Cole declined to comment.
Emulex shares closed up 5.5 percent to $9.98 on the the New York Stock Exchange on Monday, while Broadcom stock was down 3 percent at $24.37 on the Nasdaq. (Reporting by Martha Graybow, editing by Leslie Gevirtz)
