SiliconBeat

As corporate romances go, we’d say the bloom is off the rose of the courtship between Brocade Communications and Foundry Networks. It appears that both parties have developed at least a few cold toes about the matter.

Recall that Brocade recently lowered its offer for Foundry amid rumors that it was having a hard time lining up a secure source of funding for the deal since it was announced in July, when Brocade offered to pay $18.50 per share in cash plus a fractional share of its own stock that boosted the value of the total deal when it was announced to $19.25 per share.

The offer has since been lowered to $16.50 per share in cash with Foundry shareholders getting no Brocade stock out of the deal.

Now it looks as if Foundry isn’t quite sure if it wants to be acquired by Brocade Communications after all, or perhaps it thinks it can attract a better offer. It has until Friday to shop itself around according to an amended terms of the deal the companies agreed to Nov. 7, according to a filing Foundry made with the SEC on Friday, Nov. 14.

Brocade would still need to pay a termination fee ranging in size from $85 million to $125 million, “under certain circumstances,” while Foundry is “allowed to solicit, discuss, negotiate or furnish information in connection with acquisition inquiries or acquisition proposals during the period.”

And if it receives interest from another party that’s better, then Foundry “may continue to discuss such acquisition proposal with the person or entity that made such acquisition proposal.”

A deadline for the consummation of the deal has been set for Dec. 31, including the approval of the deal by Foundry’s shareholders. Should that happen it looks like all bets are off.

Another project for Foundry’s management is to try and find a way to unload its auction-rate securities before the deal closes. We’ve noticed some movement on these frozen instruments last week because of offers the Swiss investment bank UBS has made with several companies to buy up some of those assets from the corporate customers to whom it sold them.