EMC Ups Offer for Iomega
Storage infrastructure giant ups its offer by $27 million, but Chinese part-ownership deal still in the picture.
The latest bid comes after Iomega's board of directors unanimously turned down EMC's $178 million March 10 buyout bid takeover bid. EMC on March 18 improved its proposed buyout offer from $3.25 to $3.75 a share. Iomega's stock closed the trading day at $3.59.
But the Iomega board and shareholders have a big decision to make over the next few weeks: whether to continue pursuing a deal announced last December with the Chinese government, which is in the process of buying a substantial stake in the company; or to develop a new buyout agreement with EMC.
The deal with the Chinese is a stock trade deal and much more complicated than the all-cash EMC offer.
On Dec. 12, Iomega announced that it planned to acquire ExcelStor Great Wall Technology, an $800 million hard drive manufacturer based in China, through an exchange of stock.
Iomega planned to issue approximately 84 million shares of common stock, representing roughly 60 percent of the market value of the company, in exchange for 100 percent of ExcelStor, CEO Tom Kampfer told eWEEK at the time. When the deal is to be completed in mid-2008, he said, $2.6 billion Great Wall Technology-which now owns 60 percent of ExcelStor-will own about 43 percent of Iomega's stock, making GWT the largest Iomega shareholder.