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Activist Investor Elliott Boosts Stake in Emulex to 11%

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Dec. 14 (Bloomberg) -- 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., 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

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