May 4 (Bloomberg) -- Emulex Corp., the maker of chips used in data centers, said its board rejected an unsolicited takeover offer from Broadcom Corp. because the $764 million bid doesn’t reflect its value.

The $9.25-a-share offer fails to take into account Emulex’s long-term prospects, the company said today in a statement. Broadcom’s April 21 offer is 40 percent more than Emulex’s closing price the day before the bid was disclosed.

“The board has a fiduciary duty to review any proposal,” Chief Executive Jim McCluney said today in an interview. “Right now we are focused on executing our strategy,” said McCluney, when asked whether Costa Mesa, California-based Emulex is talking to other potential buyers to fend off a Broadcom takeover.

Improvements to expenses and the tax structure have made Emulex more valuable, Chairman Paul Folino said in the statement. Broadcom made the offer knowing of unannounced contracts that also add to Emulex’s worth, he said.

Broadcom, based in San Diego, California, aims to expand its range of products to lure customers as the recession forces other clients to cancel or delay orders. Emulex’s products would make Broadcom’s offerings more complete, cutting the number of suppliers clients buy from.

Emulex rose 38 cents, or 3.7 percent, to $10.75 at 4:15 p.m. in New York Stock Exchange composite trading, a sign investors expect a higher offer to emerge. The stock has dropped 22 percent in the past year. Broadcom rose 88 cents to $23.94 on the Nasdaq Stock Market.

Broadcom spokesman Bill Blanning said the company is evaluating its options.

Banc of America Securities is providing financial advice to the company and Skadden, Arps, Slate, Meagher & Flom LLP is its legal adviser. Goldman Sachs Group Inc. is providing financial advice to Emulex, while Gibson Dunn & Crutcher LLP is giving legal counsel.

To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomber.net

Last Updated: May 4, 2009 16:44 EDT