Iomega Rejects EMC Buyout Bid

By Chris Preimesberger  |  Posted 2008-03-10 Print this article Print

Iomega's REV line could support EMC's drive to offer more consumer solutions and hybrid products for home businesses and remote offices.

Consumer data storage hardware maker Iomega on March 10 revealed that it had received an unsolicited $178.1 million buyout offer from IT infrastructure giant EMC, and rejected it.

EMC told the Iomega board of directors that it is prepared to acquire the 54.8 million shares of outstanding common stock for $3.25 per share, totaling approximately $178.1 million.

Iomega stock was selling for $3.20 per share on the NYSE at 1 p.m. March 10.

Iomega's board of directors met on March 9 and unanimously determined that the proposal from EMC "would not reasonably constitute a superior proposal within the meaning of the share purchase agreement" between Iomega and its foreign ownership partners, which include China's Great Wall Technology.

"These two companies have been partners for a long time," Bob Laliberte, storage analyst with Enterprise Strategy Group, told eWEEK. "It would seem to be a natural progression for EMC to acquire Iomega in order to continue to develop more consumer-oriented products. EMC could then offer hybrid-type products for both home businesses and remote offices, using Iomega's REV line."

In October 2007, EMC acquired Berkeley Data Systems for its fast-growing Mozy online backup service, which is aimed at small and midsize businesses. Virtually all of EMC's business has been with enterprise customers prior to this year.

On March 4, Iomega introduced the largest-capacity (120GB) version of its REV product, a storage alternative to RAID systems.

"The proposed acquisition of Iomega is consistent with EMC's evolving strategy for serving the consumer and small business markets," EMC spokesperson Todd Cadley told eWEEK. "We believe we extended a compelling offer and we're disappointed with the decision of Iomega's board."

Iomega has sold more than 400 million digital storage drives and disks since its inception in 1980. The company is well known for such consumer products as the Zip and Jaz storage drives.

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 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 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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