When Foundry Networks delayed its shareholders meeting last week to vote on the proposed Brocade deal, there was speculation that A) Brocade wanted to renegotiate the price, or B) it had problems raising $400 million in high-yield bonds to help finance the deal.
Turns out the likely answer was C) both. It’s now clear Brocade did want to renegotiate, and the two companies said Wednesday night they agreed to reduce the price. The new price – $16.50 per share – comes to a total of $2.6 billion. That just happens to be $400 million less than the original purchase price of $19.25 or $3 billion. Now Brocade doesn’t have to come up with the extra financing.
Foundry shareholders are now scheduled to vote on the deal Nov. 7.