Tags: EMC | VMWare | Elliott | mergers

EMC Gets Public Call From Investor Elliott to Spin Off VMware

Wednesday, 08 Oct 2014 10:00 AM

EMC Corp. received a public call from activist shareholder Elliott Management Corp. to split from its software unit VMware Inc., following recent spinoff announcements by Hewlett-Packard Co. and EBay Inc.

EMC, the world’s biggest maker of storage computers, is structured in a way that hides shareholder value, Elliott said today in letter to the company. The current structure “obscures enormous value,” which could be recognized by separating VMware or pursuing various merger and acquisition options, according to the letter.

Elliott’s call follows a recent trend by technology companies to carve themselves into pieces to maximize shareholder value and remain competitive. EBay said on Sept. 30 that it would separate its PayPal digital-payments unit and marketplace business into two companies. Hewlett-Packard said this week it would spin off the personal computer and printers businesses into one entity and carve the corporate hardware and services businesses into another company.

“EMC owns great assets,” Elliott said. “The potential for a separation has often been discussed, and the benefits from a value standpoint are enormous.”

Elliott had amassed a position of more than $1 billion in Hopkinton, Massachusetts-based EMC and was already pushing for a spinoff of VMware, Bloomberg News reported in July, citing a person familiar with the matter. Elliott said today that it has a 2.2 percent stake in the company.

EMC rose 0.7 percent to $28.34 at 9:03 a.m. in early trading, while VMware, which is also publicly traded, advanced 0.9 percent to $92.24 at 8:55 a.m.

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EMC received a public call from activist shareholder Elliott Management to split from its software unit VMware, following recent spinoff announcements by Hewlett-Packard and EBay.
EMC, VMWare, Elliott, mergers
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2014-00-08
Wednesday, 08 Oct 2014 10:00 AM
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