Updated from 11:21 a.m. EDT

Storage specialist Emulex ( ELX) has rejected rival Broadcom ( BRCM)'s hostile $763.5 million takeover attempt.

"The Emulex board unanimously concluded that it was an opportunistic attempt by Broadcom to capture substantial current and long-term value that properly belong to Emulex shareholders," said Emulex Chairman Paul Folino in a statement.

The Costa Mesa, Calif.-based company, which makes chips and components for fibre-channel storage systems, became a Broadcom acquisition target last month. The unsolicited bid, which came in the form of a letter to Emulex management, called for Broadcom to pay $9.25 a share in cash for Emulex's stock.

In a letter to Broadcom's board, which was made public early Monday, Folino said that the bid was clearly timed to take advantage of Emulex's depressed stock price as a result of the economic downturn.

Emulex's shares were trading around $6.60 prior to the Broadcom bid, well below their 52-week high of $14.74, but have subsequently climbed to more than $10.

The financial meltdown is seen as offering great buying opportunities for predatory firms, as evidenced by Oracle's ( ORCL) recent shock acquisition of Sun Microsystems ( JAVA). Emulex, however, is playing hardball.

In his rejection letter, Folino pointed to "significant" unannounced deals that Emulex has clinched with server and storage companies, and launched a quick jab Broadcom.

"Given that some of these design wins have come at your expense, including your core Ethernet networking business, you are uniquely aware of the future value we have secured and how well positioned we are to unseat you on many other platforms in the near future," he wrote.

Broadcom has not yet responded to a request for comment from TheStreet.com but was eyeing Emulex as a way to boost its presence in data centers. The Irvine, Calif.-based firm recently swung to a big loss on weak first-quarter sales, but issued bullish second-quarter guidance.

Emulex, which reported better-than-expected third-quarter adjusted profit has also been feeling the strain, and its recent results were marred by lower revenue and severance costs.

Broadcom investors shrugged off Emulex's snub, and the company's stock rose 2.5% to $23.63, as the Nasdaq climbed 1.78%. Emulex's stock rose 2.9%, to $10.67.

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