EMC Ups Offer for Iomega

By Chris Preimesberger  |  Posted 2008-03-18 Print this article Print

Storage infrastructure giant ups its offer by $27 million, but Chinese part-ownership deal still in the picture. 

Iomega is indicating it is willing to consider EMC's latest offer, a $205.5 million cash buyout bid presented March 18.

The consumer storage hardware maker said it is prepared to begin talks with EMC regarding the acquisition of its 54.8 million outstanding shares.

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.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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