Is Emulex (ELX) More Open to a Takeover?

Shares of Emulex Corp. (NYSE: ELX) are 7% higher this morning following news late Friday that the company's Board approved the early termination of the rights agreement and restated the bylaws to permit the amendment of the Bylaws by the Board or by a majority vote of the stockholders at any annual or special meeting of stockholders. Some analysts are suggesting that this news could suggest the company is more open to an acquisition.

Analyst at Goldman Sachs said the removal of Emulex's shareholder rights agreement and the change in the company’s bylaws should be positive for Emulex shares. The firm said "these changes suggest that, at a minimum, the company is more focused on enhancing shareholder value and possibly signals a greater openness to an acquisition."

The firm raised their price target on ELX from $11.50 to $12, but maintained their Neutral rating.

Earlier in the year, Emulex rejected an overture from Broadcom (Nasdaq: BRCM) at $9.25 per share and a raised offer at $11 per share.

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