![]() ![]() “Elliott is pleased to participate in VMware’s ongoing upside through the tracking stock, which will benefit from both meaningful synergies as part of Dell’s organization as well as far greater liquidity than VMware shares have today,” Jesse Cohn, senior portfolio manager at Elliott, said in a statement. ![]() While IBM, Cisco, Oracle Corp and Hewlett-Packard could potentially be suitors for EMC, the chances of them challenging Dell with a rival offer are slim, people familiar with the matter told Reuters.Īctivist hedge fund Elliott Management, which has a 2.2 percent stake in EMC and had been calling for a break-up of the company, welcomed the deal with Dell and said it was the best outcome for EMC shareholders. FBR Capital Markets analyst Daniel Ives said shareholders were concerned, however, that VMware would lose talented employees amid uncertainty about their future under Dell, eventually hurting the company’s performance. VMware will remain a publicly traded company. VMware shares plunged 7.8 percent to $72.48, decreasing the value of Dell’s offer. EMC shares rose 1.8 percent to $28.36 after earlier jumping more than 2.5 percent. The stock market gave the deal a lukewarm response. Dell will pay $24.05 per share in cash and will also give EMC shareholders a special stock that tracks the share price in VMWare Inc, the maker of cloud-based virtualization software majority-owned by EMC. The deal valued EMC at $33.15 a share as of the end of trading Friday. ![]() EMC had some enterprise products, but not the complete package.” “Dell was mostly on the consumer side, which is a terrible place to be. “I don’t think either Dell or EMC were viable over the long run as a standalone they really needed each other,” said Eric Johnson, dean of the Owen Graduate School of Management at Vanderbilt University. IBM Corp sold its PC unit a decade ago.īy combining Dell’s server businesses with EMC’s storage and virtualization assets, the new, enlarged company will have a broader range of products to challenge Cisco Systems Inc, IBM and Hewlett-Packard in the areas of cloud computing, mobility and cyber security. 2 PC maker, is splitting off its computer and printer unit this year to focus on the corporate data business. That desire to reach beyond PCs - whose growth has been stopped in its tracks with the rise of mobile devices - echoes moves by Dell’s big rivals. 3 computer maker, diversify from a stagnant consumer PC market and give it greater scale in the more profitable and faster-growing market for cloud-based data services. ![]() The deal should help privately held Dell, the world’s No. The deal will be financed through a combination of new equity from Dell's owners - founder and Chief Executive Michael Dell, its investment firm MSD Partners, private equity firm Silver Lake and Singapore state-owned investor Temasek Holdings - as well as the issuance of the tracking stock, new debt and cash on hand.The acquisition, the year’s third-largest in all sectors, highlights the frenzy of dealmaking sweeping the economy, as big or mature companies take advantage of low interest rates to buy rivals as a way to spur growth. "Elliott is pleased to participate in VMware`s ongoing upside through the tracking stock, which will benefit from both meaningful synergies as part of Dell's organization as well as far greater liquidity than VMware shares have today," Jesse Cohn, senior portfolio manager at Elliott, said in a statement. "We view this as a good outcome for EMC shareholders after a nightmarish few years of slowing growth and an antiquated federated strategy," said FBR Capital Markets analyst Daniel Ives.Īctivist hedge fund Elliott Management, which has a 2.2 per cent stake in EMC and had been calling for a break-up of the company, welcomed the deal with Dell and said it was the best outcome for EMC shareholders. While IBM, Cisco, Oracle Corp and Hewlett-Packard could potentially be suitors for EMC, the chances of them challenging Dell with a rival offer are slim, people familiar with the matter told Reuters. The merger agreement includes a 60-day 'go-shop' provision that allows EMC to solicit bids from other parties and pay a discounted breakup fee to Dell if a deal is made with another company, as Reuters first reported on Sunday. EMC's board has approved the merger and will recommend that shareholders do so as well. ![]()
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