Activist Investor Elliott Boosts Stake in Emulex to 11%

Elliott Management Corp., the activist investor that pushed Novell Inc. to sell itself in 2010, has amassed more than an 11 percent stake in Emulex Corp. (ELX), a provider of converged networking solutions for data centers.

Elliott, the New York-based hedge-fund investor, said in a regulatory filing yesterday it bought an additional 1.34 percent stake in the company through derivative agreements. Elliott reported a 9.96 percent stake in Emulex with a 13D filing Nov. 23, becoming the largest shareholder and gaining an opening to agitate for change at the Costa Mesa, California-based company.

Peter Truell, a spokesman for Elliott, and Katherine Lane, a spokeswoman for Emulex, declined to comment.

Emulex has a market capitalization of about $597 million. The stock gained 1.1 percent to $6.66 at 10:50 a.m. in New York. Through yesterday, the stock had lost 3.9 percent this year.

Fund managers sometimes use their status as shareholders to urge management to shift strategy or look for a buyout. Emulex adopted a so-called poison pill in 2009 to fend off Broadcom Corp.’s takeover approach.

Elliott made an unsolicited $2 billion offer for Novell after building an 8.5 percent stake in the Linux software maker. Novell was later bought by Attachmate Corp. for $2.2 billion.

More recently, Elliott pressed BMC Software Inc. for several months to consider a sale, resulting in a $1 billion share buyback announced Oct. 31. The activist investor amassed a stake in Brocade Communications Systems Inc. as of August 2011, and a year later Chief Executive Officer Michael Klayko said he would step down after trying to sell the company for more than two years.

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

To contact the editor responsible for this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.