Iomega wooed by new EMC offer
Unzips superior proposal
Iomega has changed its tune over EMC Corporation’s approach to buy the company after its suitor upped the offer to $205.5m.
According to Iomega, the new offer will push up the bid price to as much as $3.75 per share. A week ago EMC indicated that it was prepared to offer to acquire Iomego for $3.25 per share.
In December, Iomega said that it planned, in an all-stock deal, to buy Chinese hard disk drive manufacturer ExcelStor, a subsidiary of Great Wall Technology, an Iomega shareholder. Great Wall in turn is a subsidiary of Chinese government-owned China Electronics Corporation.
Iomega’s change of heart today to enter into talks with EMC regarding its non-binding offer could lead to a definitive takeover proposal. However, the firm added that the purchase agreement with ExcelStor has not been withdrawn and “remains in force and effect”.
If that deal closes Great Wall Technology would hold a majority stake in Iomega, but it’s unclear how such an agreement would fit into any takeover plan from EMC.
An EMC spokesman said: "We're encouraged by Iomega's decision to move ahead with EMC discussions, and look forward to next steps," reports Associated Press.
Iomega shares closed up nearly nine per cent to $3.54 in morning trading on Wall Street, while EMC’s stock dropped more than four per cent to $14.15. ®