UPDATE 3-Emulex holders urged to reject Broadcom proposals

* Glass Lewis recommends against Broadcom proposals

* Emulex shares down 2 pct; Broadcom down 3 pct (Adds analyst comment, updates share movement)

By Shrutika Verma

BANGALORE, June 22 (Reuters) - Emulex Corp (ELX.N) said proxy advisory firm Glass Lewis & Co has recommended against the consent solicitation begun by Broadcom Corp (BRCM.O) with respect to its $9.25 per share tender offer for the storage technology company.

Glass Lewis said in its report that Broadcom had submitted governance reforms merely in an effort to force an acquisition of the company and that it has little interest in the long-term corporate governance of the company, Emulex added.

In response to the Glass Lewis report, Broadcom said the "recommendation against consent fundamentally misinterprets Broadcom's consent solicitation."

"Glass Lewis's position is particularly perplexing," Broadcom said, adding that the firm had made an initial recommendation supporting proposals, which would give shareholders the right to call a special meeting for replacing the incumbent directors.

ThinkEquity analyst Rajesh Ghai said the issue was not about these corporate dealings that are going on.

"The real issue is, are Emulex shareholders happy with the price that Broadcom is willing to pay for the technology?" he said. "At this point of time the valuation that Broadcom has...is something that Emulex shareholders don't agree with."

Emulex shares have risen 62 percent since Broadcom's bid on April 21.

Emulex rejected the chipmaker's bid in May and has urged shareholders to do the same, calling the offer "grossly inadequate."

Broadcom first expressed its interest in Emulex in late April and has twice extended the deadline of its tender offer, amid little sign that shareholders are warming to the $764-million hostile bid. [ID:nN18487764]

Broadcom also sued the storage-equipment maker for adopting a "poison pill" to prevent a hostile takeover.

Shares of Emulex were down more than 2 percent at $10.76 Monday on the New York Stock Exchange, while those of Broadcom fell 3 percent to $24.66 on Nasdaq. (Editing by Anil D'Silva)