Foundry postpones vote on Brocade deal, stock plunges

Brocade announced intentions to acquire Foundry in July

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.

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