Foundry postpones vote on Brocade deal, stock plunges
- — 27 October, 2008 08:29
Foundry Networks stock closed down over 25 percent Friday after the company said it is postponing a shareholder vote on its merger with Brocade.
Brocade announced intentions to acquire Foundry for over US$19 a share, or US$3 billion. On Friday, the day the vote was scheduled, Foundry's stock was down to US$12.67, a drop of over US$4.
Shareholders will now vote on the merger Wednesday, October 29. Foundry said the postponement was due to "recent developments related to the (Brocade) transaction."
Foundry last week reported a 35 percent drop in third quarter profits on sales 4 percent better than last year. Foundry attributed the decline in earnings to costs associated with the Brocade merger.