BRCD is a buy with Foundry inside:
Brocade and Foundry Networks Announce Signing of Amendment to Definitive Agreement for Acquisition of Foundry by Brocade
Date : 11/07/2008 @ 6:32PM
Source : PR Newswire
Stock : Foundry Networks (MM) (FDRY)
Quote : 16.66 0.0 (0.00%) @ 2:05AM
Brocade and Foundry Networks Announce Signing of Amendment to Definitive Agreement for Acquisition of Foundry by Brocade
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Foundry Networks (MM) (NASDAQ:FDRY)
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Brocade(R) (NASDAQ:BRCD) and Foundry Networks(R), Inc. (NASDAQ:FDRY) today announced that they have signed an amendment to the definitive agreement, which provides for the acquisition of the outstanding shares of Foundry Networks by Brocade. Under the revised terms, Foundry stockholders would be entitled to receive $16.50 per share in an all-cash transaction at the closing of the deal, as previously announced by the companies on Oct. 29, 2008.
In addition, Foundry stockholders may receive the proceeds of the sale of Foundry's portfolio of auction rate securities -- up to approximately $50 million in the aggregate -- calculated on a fully diluted basis based on the treasury stock method, if Foundry is successful in liquidating its portfolio of these securities prior to the close of the acquisition. It is anticipated that such amount, if any, would be distributed shortly before the closing of the acquisition through a dividend to Foundry stockholders.
Brocade expects to finance the acquisition from various financing sources, including cash on hand at both companies and the net proceeds from a $1.1 billion term loan facility which has already been deposited into a restricted Brocade custody account pending the closing of the acquisition of Foundry and other customary release conditions.
"We are excited about this transaction and believe that the combination will provide a number of strategic and financial benefits that we expect will be well-received by the customers of both companies," said Mike Klayko, CEO of Brocade. "This will help to solidify Brocade's position as a proven, high-performance networking leader for today's most demanding, data-intensive organizations."
The two companies originally entered into an agreement on July 21, 2008. The revised agreement has been approved by the boards of directors of Brocade and Foundry, and the board of directors of Foundry has unanimously recommended that Foundry stockholders vote in favor of the revised transaction. Foundry stockholders must also vote on the revised agreement in a special meeting currently expected to be held in December 2008. Pending Foundry stockholder approval, the companies expect to close the transaction in late December 2008, subject to the satisfaction of customary terms and conditions.
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