NEW YORK (Reuters) - Broadcom Corp's (BRCM.O) $764 million bid for Emulex Corp (ELX.N) turned hostile on Tuesday as the chipmaker took its offer directly to Emulex shareholders at the same price that the company had rejected.

Shares of Emulex, which supplies storage technology, rose 2 cents to close at $10.77, staying above Broadcom's $9.25-a-share offer in expectations of a higher bid from Broadcom or another company. Broadcom shares closed up 1 percent, or 26 cents, at $24.20.

While we much prefer to arrive at a negotiated agreement with Emulex, the Emulex board has left us with no choice but to ask Emulex stockholders to call for a special meeting of stockholders so that they can consider the merits of our offer for themselves, Broadcom Chief Executive Scott McGregor said in a statement.

Emulex issued its response after the market closed on Tuesday, advising shareholders to take no action.

The company added it will review Broadcom's consent solicitation and make its recommendations in due course.

Some analysts said they did not expect shareholders of Emulex, which makes components used to connect computers to remote storage equipment, to accept Broadcom's price, whether or not another bidder comes in.

I think we'll probably see something more in the neighborhood of $11 to $12, said Pacific Crest analyst Ruben Roy, who estimated that the deal would still boost Broadcom's profit at a price tag of close to $14 a share.

But others were skeptical that Broadcom would raise its offer. Jefferies & Co analyst Adam Benjamin said on Tuesday it could be using the public bid as a way to distract Emulex enough to raise concerns among its customers.

I'm pretty convinced they're not going to raise their offer at this point, he said, adding that no other bidder has surfaced to date.

Analysts have said the battle between Broadcom and Emulex may start a bidding war that could also put Emulex rival QLogic Corp (QLGC.O) into play.

Broadcom competitor Marvell Technology Group (MRVL.O) would be a possible rival suitor for Emulex, Benjamin said. But he added that Marvell could have difficulty raising money for a bid. Marvell declined comment.


Benjamin noted that Emulex could potentially be a fit for Intel Corp (INTC.O), which also makes chips used in storage equipment. Intel declined comment.

A person with knowledge of Intel's thinking said Emulex is unlikely to be a target given Intel's focus on microprocessors. Intel does not play in the market for network connection cards, where Emulex is strong, according to the source who could not speak publicly on the matter.

Emulex's board rejected Broadcom's offer on Monday, saying it undervalued the company, which is a leader in storage products based on a technology known as fiber channel.

Emulex Chief Executive Jim McCluney told Reuters that his company recently won several design contracts away from Broadcom, which makes chips for Ethernet storage products. Broadcom's bid stems from those contract wins, he said.

Broadcom, a maker of chips for everything from phones to television set-top boxes, first announced its unsolicited bid for Emulex on April 21. It said the offer would expire June 3.

On Tuesday, Broadcom filed with U.S. regulators to seek Emulex shareholders' consent for amendments to the company's bylaws to let holders of 10 percent of Emulex shares call a special shareholder meeting.

McGregor said Emulex was losing market share and failing to convert design wins into revenue as a stand alone company.