Iomega Considers Acquisition Offer From EMC
Iomega, of San Diego, Calif. on Monday said that Hopkinton, Mass.-based Iomega sent a revised, unsolicited, non-binding indication of interest to acquire Iomega for up to $3.75 per share.
The offer came exactly one week after Iomega rejected an offer from EMC of $3.25 per share.
Iomega has about 54.8 million outstanding shares, giving the potential deal a value of $205.5 million, up from last week's total offer of $178.1 million.
On Monday, Iomega's Board of Directors, after consulting with the company's financial and legal advisors, said the revised acquisition proposal "would reasonably constitute a superior proposal." Last week, Iomega said EMC's offer was not a superior proposal.
The term "superior proposal" is defined by Iomega in the context of the company's previously announced agreement under which Iomega would purchase ExcelStor Great Wall Technology Limited, Cayman Islands, and Shenzhen ExcelStor Technology Limited, China, from China-based Great Wall Technology Company Limited and associated companies.
Under the deal to acquire ExcelStor, which develops and produces a variety of computer and communications products, announced in December, Iomega said it would issue up to 84 million shares of common stock in exchange for all ExcelStor common shares. That deal has been approved by both companies' Boards of Directors, and is subject to regulatory and stockholder approvals.
EMC and Iomega executives declined to comment on the proposed acquisition.
An EMC spokesperson said that the offer to acquire Iomega is consistent with that company's strategy in the consumer and small business spaces, and that EMC is "energized" by Iomega's decision to move ahead with discussions.
An Iomega spokesperson said that, according to the terms of its agreement with ExcelStor, Iomega had to notify ExcelStor about any acquisition talks two business days prior to such talks starting. Iomega notified ExcelStor about the EMC proposal on Friday, which means that Iomega and EMC can start discussions on Tuesday.
After reviewing EMC's latest proposal, Iomega said in a statement that it will evaluate all aspects. However, Iomega said, its Board of Directors have not determined that the EMC offer is superior to the plan to combine with ExcelStor "as there are no agreed upon terms for a transaction with EMC."
EMC has been on an acquisition spree in the past couple years.
Last month, EMC said it plans to acquire Pi, a privately-held developer of software and provider of services for personal information management. Pi is developing products to help end-user consumers to access, organize, and protect data from anywhere, as well as similar products for corporate environments.
In October, EMC acquired Berkeley Data Systems, the American Fork, Utah-based developer of the technology behind the Mozy online backup business, in a deal worth $76 million.