Iomega Rejects EMC Buyout Bid

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.