Plenty Of Room On The Bandwagon As Starboard Takes A Big Stake In Elliott Associates Project Emulex Corp.


Starboard Value takes the Fantastic Voyage with Elliott Associates as it awaits Emulex Corporation’s sale.

It is always heartwarming to see two of our favorite funds working together, sort of.

Starboard Value disclosed a 6.9% stake in Emulex Corporation in a Schedule 13D on Tuesday.

As regular readers know, we have been following Elliott Associates’ dealings with Emulex since the beginning of the year and added Emulex to our Opps Tracker on the strength of Elliott’s interest (up 2.7% since we added it, after falling dramatically after the beginning of the year).

Word is that Emulex has hired bankers (rumored to be Goldman Sachs) to try to sell the company.  This seems like another good reason for Starboard to get in.  Starboard itself said that it made its investment because Emulex shares “were undervalued and represented an attractive investment opportunity.”  This is standard boilerplate, but in context, they seem to be riding in the wake of the rumors of Emulex marketing itself to buyers.

According to the Schedule 13D, in the last 60 days, Starboard bought 3,850,000 shares of ELX at an average price of $6.41.  They also bought options to acquire another 250,000 shares at a strike price of $7.00/share for an option price of an additional $1.13/share, putting their target price per share somewhere north of $8.13.  Following these purchases, Starboard holds 6,250,000 shares of ELX.

Starboard and Coolio sing:
Come along and ride on a fantasic voyage
Slide slide slippity-slide
With switches on the block in a ’65
Come along and ride on a fantasic voyage
Slide slide who-ride
Ain’t no valley low enough for mountain high


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