DOW JONES NEWSWIRES 
 

Emulex Corp. (ELX) said Monday that its board rejected Broadcom Corp.'s (BRCM) unsolicited $764 million takeover bid, saying the $9.25 a share offer "significantly undervalues" the networking technology maker's long-term prospects.

In a letter to Broadcom board's, Emulex's board said the offer lowballs the company, particularly regarding network convergence technology, and that it is timed to take advantage of the company's depressed stock price. From August to early March, shares tumbled from $14 per share to $4.50 per share, a 10-year low.

The stock has been trading above Broadcom's offer price, and was down 3.1% premarket at $10.05. Broadcom gained 1.9% to $23.50 per share.

Emulex President and Chief Executive Jim McCluney said the company is poised to gain market share "at the expense of Broadcom and our other competitors."

Emulex had rejected prior advances and in January installed "poison pill" protections against hostile takeover offers.

A deal for Emulex would allow Broadcom to sell another technology used in storage networking. Broadcom sells ethernet networking equipment for the connections in company data centers; meanwhile, Emulex - and rival Qlogic Corp. (QLGC) - focus on technology known as fibre channel.

Ethernet is expected to replace fibre-channel technology in storage networks; however, fibre-channel remains the storage network standard. Analysts say the ability to sell both ethernet and fibre-channel could give Broadcom a strategic advantage when the two technologies converge.

-By Tess Stynes, Dow Jones Newswires; 201-938-2473; tess.stynes@dowjones.com