By Nadia Damouni and Soyoung Kim and Greg Roumeliotis
NEW YORK, Oct 14 (Reuters) - Emulex Corp has held talks with a few private equity firms, including Francisco Partners LP, Thoma Bravo LLC and Thomas H. Lee Partners LP about selling itself, but a deal remains uncertain for the struggling chip maker, according to several people familiar with the matter.
The discussions with the private equity firms have been underway for the past few months, but have so far failed to lead to an offer that Emulex's board would accept, the people said, asking not to be identified because they were not authorized to disclose details of the process.
Some prospective buyers remain jittery over potential legal liabilities of Emulex, which has been mired in a patent infringement lawsuit filed by bigger competitor Broadcom Corp , some of the people added.
Emulex, Francisco Partners, Thoma Bravo and Thomas H. Lee Partners declined to comment.
The talks with the private equity firms highlight how Emulex has found it more difficult of late to attract interest from other companies in its sector.
The Costa Mesa, California-based company, which sells chips that help computer servers and storage networks transfer data, rejected an $11 per share offer from Broadcom in 2009.
Shares of Emulex have since declined substantially, currently trading at just around $7.76 and valuing the company at around $700 million. This has led some Emulex investors to call for a sale of the company, leading to the buyout talks.
Activist investor Elliott Management is the largest shareholder with a nearly 10 percent stake according to the latest Thomson Reuters data, followed by Starboard Value LP at 7.7 percent and Altai Capital Management LP at nearly 6 percent.
In September, Starboard said Emulex was "extremely undervalued" and called for reconstituting the board to include shareholder advocates. Altai Capital, meanwhile, has been urging the company to consider selling itself since the beginning of the year.
Last month Elliott, which has a track record of pushing companies to sell themselves, extended a standstill agreement it first signed with Emulex in March by one month to Oct. 20.
Michael Rockenbach, who has served as chief financial officer of Emulex since 1997, will step down as of the end of the year, the company announced last month.
Emulex was founded in 1979 and employs nearly 900 people worldwide as of 2012. The company's products are sold by partners including Cisco Systems Inc, Dell, EMC Corp , according to its website.