Iomega says no to EMC
Drives unsolicited bid outta town
Portable hard drive maker Iomega has rejected a hostile $178m takeover bid from storage giant EMC.
The San Diego-based firm said in a statement that EMC’s indication that it was preparing to offer to acquire Iomega’s outstanding common stock for $3.25 per share “would not reasonably constitute a superior proposal”.
The Iomega board of directors added that "proposed due diligence contingencies were overly broad".
The board unanimously trampled on the bid at a meeting yesterday agreeing that the share purchase deal already in place with a number of firms based in the Cayman Islands, China and the British Virgin Islands, would not be superseded by EMC’s offer.
In December the firm said that it planned to buy Chinese hard disk drive manufacturer ExcelStor, a subsidiary of Iomega shareholder Great Wall Technology, which is a subsidiary of Chinese government-owned China Electronics Corporation.
Terms of that deal have been kept secret, but when it closes, subject to the usual regulatory clearance, Great Wall Technology will hold a majority stake in Iomega and Excelstor will function as a wholly-owned subsidiary of Iomega.
Things have been hotting up in the storage game over the past year or so with a number of big name vendors such as Seagate and Hitachi GST snapping up companies to enable them to go vertically integrated.
EMC's bid to buy out Iomega was presumably the Massachusetts-based firm's attempt to push its own end-to-end storage solution right down to the low-end.
EMC was not immediately available for comment. ®