[Infowarrior] - EMC to buy Zip drive maker Iomega

[Richard Forno]

EMC to buy Zip drive maker Iomega
Tue Apr 8, 2008 5:35pm EDT
 
http://www.reuters.com/article/technologyNews/idUSWNAS716720080408?sp=true

SAN FRANCISCO (Reuters) - Iomega Corp (IOM.N: Quote, Profile, Research) said
on Tuesday it had accepted an increased cash takeover offer of $213 million
from EMC Corp (EMC.N: Quote, Profile, Research) and would drop a plan to buy
a unit of China's Great Wall Technology Co Ltd (0074.HK: Quote, Profile,
Research) in a stock swap.

The deal allows EMC, the world's largest data-storage provider, to expand in
the consumer and small business markets.

EMC will pay $3.85 per Iomega share, 6 percent more than Iomega's Tuesday
closing price of $3.64 and above an EMC offer in March of $3.75.

Shares of Iomega rose 4.4 percent to $3.80 in extended trade following the
announcement, and EMC was unchanged at $14.84.

Shares of Iomega, known for its Zip drives, peaked in May 1996 at about $110
per share and were popular with online investors in the post-Netscape era of
hot initial stock offerings.

Iomega had rejected EMC's initial offer and then began talks when the larger
company sweetened its bid to $3.75 a share, or $205.5 million, in March.

Last December, Iomega had signed a deal to buy ExcelStor, a unit of Great
Wall Technology, in a stock swap valued at the time at $306 million. That
deal would have made Great Wall its largest shareholder.

Iomega said on Tuesday it paid $7.5 million to terminate the ExcelStor deal
in favor of EMC's offer.

Iomega said on March 17 it was prepared to enter talks with EMC, based in
Hopkinton, Massachusetts, after it sweetened its offer to $3.75 a share.

EMC said the acquisition, expected to be completed in the second quarter,
would have no material impact on EMC finances.

Iomega, based in San Diego, was an investor favorite in the 1990s but fell
out of favor after the technology bubble burst. The maker of
network-attached storage products, external hard-disk drives and removable
storage retains a strong brand recognition among consumers.

(Reporting by Philipp Gollner and Duncan Martell; editing by Jeffrey Benkoe
and Braden Reddall)