SAN FRANCISCO, April 8 (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)
