Emulex Corp. (ELX) rejected a $9.25 a share takeover bid from Broadcom Corp. (BRCM) Monday in what many expect is the opening round of a lengthy acquisition battle.

Emulex, which makes the networking technology used to connect the servers and equipment in company data centers, said the offer undervalues its long-term prospects. The company added that it has "significant new unannounced design wins," with top manufacturers, which are expected to be multi-million dollar, multi-year deals, said President and Chief Executive Jim McCluney.

Emulex shares, which have traded above Broadcom's offer price since the offer was made public, were recently up 7 cents to $10.44 per share, suggesting that investors expect a higher bid.

Broadcom shares were recently down 19 cents to $22.88 per share.

In a letter to Broadcom board's, Emulex's board said the offer lowballs the company, particularly regarding network convergence technology, and that it is timed to take advantage of the company's depressed stock price. From August to early March, shares tumbled from $14 per share to $4.50 per share, a 10-year low.

Broadcom was not immediately available for comment.

Emulex had rejected prior advances and in January installed "poison pill" protections against hostile takeover offers.

Analysts said Emulex was mostly expected to turn down the offer. Broadcom can likely afford to up the bid by "a few dollars" a share while still having the deal add to earnings within the first year, said Robert W. Baird analyst Tristan Gerra. Stifel Nicolaus analyst Cody Acree said Broadcom could eventually bump the price up into the $12 to $13 range.

A deal for Emulex would allow Broadcom to sell another technology used in storage networking. Broadcom sells ethernet networking equipment for the connections in company data centers; meanwhile, Emulex - and rival Qlogic Corp. (QLGC) - focus on technology known as fibre channel.

Ethernet is expected to replace fibre-channel technology in storage networks; however, fibre-channel remains the storage network standard and companies are currently moving to sell products that combine the two technologies.

Emulex has already released a product that combines ethernet and fibre-channel, and has inked deals with major manufacturers to use its products.

As such, Emulex is poised to gain market share at the expense of Broadcom and other competitors, McCluney said, adding in an interview with Dow Jones Newswires, "We are arguably a year ahead of the rest of the market." "We are displacing (Broadcom) at some of their most major customers," he said.

Analysts say the ability to sell both ethernet and fibre-channel could give Broadcom a strategic advantage when the two technologies converge.

-By Jerry A. DiColo, Dow Jones Newswires; 201-938-5670; jerry.dicolo@dowjones.com

(Tess Stynes contributed to this report)