EMC Spurned in Bid for Disk Drive Maker Iomega
San Diego-based Iomega (NYSE:IOM), a maker of storage drives and disks for consumers and small and medium-sized businesses, has rejected an unsolicited offer from EMC to buy the firm for roughly $180 million, the California company announced this morning. Iomega’s board of directors met Sunday to consider the offer and determined it undervalued the firm, according to a company statement. Iomega also called EMC’s due diligence provisions “overly broad.”
For its part, Hopkinton, MA-based EMC (NYSE:EMC) was mum on the deal, other than to release the following brief statement: “The proposed acquisition of Iomega is consistent with EMC’s evolving strategy for serving the consumer and small business markets. We believe we extended a compelling offer and we’re disappointed with the decision of Iomega’s board.”
The EMC offer involved the purchase of all the roughly 54.8 million outstanding shares of Iomega common stock for $3.25 per share. It came just a few months after Iomega reached a complicated share purchase agreement, announced in December, with companies registered in China and the Cayman Islands. An Iomega spokesman today explained that under that agreement, Iomega would continue to trade on the NYSE. However, the majority of the firm’s shares would be controlled by stockholders of Great Wall Technology of China. In today’s press release, Iomega said only that the EMC proposal “would not reasonably constitute a superior proposal” to that deal.
Iomega was up 31 cents (nearly 12 percent) this morning, at $2.95.