News

posted on 17 March 2008 17:14

EMC has upped its table stakes for the Iomega bid and gained a result; Iomega has agreed to enter discussions but doesn't indicate any willingness to be acquired.

The bid for Iomega has increased from $178 million to $205 million. Iomega admits that this revised EMC bid reasonably constitutes a superior proposal to the share purchase agreement with Great Wall Technology's subsidiary, ExcelStor. On that basis Iomega will provide relevant information to EMC and begin discussions.

But Iomega reminds us that:-

1. "It has not determined that a transaction with EMC is superior to the business combination contemplated under the ExcelStor Purchase Agreement as there are no agreed upon terms for a transaction with EMC."

2. "There can be no assurance that EMC will ultimately make an offer that Iomega's board of directors will determine constitutes a superior proposal or that Iomega and EMC will reach an agreement on terms regarding the acquisition of Iomega by EMC. "

3. " There can be no assurance that, if an agreement is reached between Iomega and EMC, the price per share paid by EMC will be equal to the price per share specified in EMC's current non-binding indication of interest."

4. "There is no definitive proposal with terms and Iomega's board of directors has not approved, adopted or recommended an EMC acquisition proposal."

5. "Iomega's board of directors has not withdrawn, qualified, or modified its recommendation with respect to the ExcelStor Purchase Agreement, or the transactions contemplated thereby, and the ExcelStor Purchase Agreement among Iomega, the Selling Shareholders and ExcelStor remains in full force and effect."

From here on Iomega intends to say nothing more unless it is required to under the terms of the ExcelStore purchase agreement. It will enter into a confidentiality agreement with EMC but will not issue any further press releases on the matter or update the market about the status of the bid.

An EMC statement said: "We're encouraged by Iomega's decision to move ahead with EMC discussions, and look forward to (the) next steps."

It looks as if Iomega is going to be reluctant bride if an arranged marriage with EMC does, eventually, take place.

[Phil Robson, news editor.]