To Get Iomega, EMC Increased its Proposal by 15%

Iomega Corporation announced receipt of a revised unsolicited non-binding indication of interest from EMC Corporation, in which EMC indicated that it is prepared to offer to acquire the outstanding common stock of Iomega for up to $3.75 per share, assuming a total of approximately 54.8 million outstanding shares, subject to completion of due diligence.

The Iomega board of directors, after consultation with its financial and legal advisors, has determined that the revised acquisition proposal from EMC would reasonably constitute a superior proposal as defined in the previously announced share purchase agreement that Iomega entered into with ExcelStor Great Wall Technology Limited, a Cayman Islands company, Shenzhen ExcelStor Technology Limited, a PRC company, Great Wall Technology Company Limited, a People’s Republic of China company , ExcelStor Group Limited, a Cayman Islands company, and ExcelStor Holdings Limited, a British Virgin Islands company, on December 12, 2007.

Based on this determination and as permitted by the ExcelStor Purchase Agreement, Iomega’s board of directors has authorized Iomega to furnish information to EMC and enter into discussions with it regarding its most recent proposal. Pursuant to the ExcelStor Purchase Agreement, Iomega must provide the Selling Shareholders with at least 2 business days notice prior to entering into discussions with or furnishing any information to EMC in response or with respect to the EMC acquisition proposal. Iomega provided such notice to the Selling Shareholders on March 14, 2008.

Iomega’s board of directors, together with its financial and legal advisors, will continue to evaluate all aspects of the acquisition proposal from EMC. While Iomega’s board of directors has determined that the EMC acquisition proposal would reasonably constitute a superior proposal, it has not determined that a transaction with EMC is superior to the business combination contemplated under the ExcelStor Purchase Agreement as there are no agreed upon terms for a transaction with EMC.

The EMC acquisition proposal is a non-binding indication of interest and is subject to completion of due diligence of Iomega by EMC and agreeing to terms for a definitive agreement. There can be no assurance that EMC will ultimately make an offer that Iomega’s board of directors will determine constitutes a superior proposal or that Iomega and EMC will reach an agreement on terms regarding the acquisition of Iomega by EMC. Additionally, there can be no assurance that, if an agreement is reached between Iomega and EMC, the price per share paid by EMC will be equal to the price per share specified in EMC’s current non-binding indication of interest.

While Iomega’s board has authorized Iomega to enter into discussions with EMC, there is no definitive proposal with terms and Iomega’s board of directors has not approved, adopted or recommended an EMC acquisition proposal. Moreover, Iomega’s board of directors has not withdrawn, qualified, or modified its recommendation with respect to the ExcelStor Purchase Agreement, or the transactions contemplated thereby, and the ExcelStor Purchase Agreement among Iomega, the Selling Shareholders and ExcelStor remains in full force and effect.

As required by the ExcelStor Purchase Agreement, before entering into discussions with or furnishing any information to EMC, Iomega will execute a confidentiality agreement with EMC. As a matter of policy, and consistent with its obligations under the ExcelStor Purchase Agreement, Iomega will not be issuing any further press releases and will not be updating the market about the status of the EMC acquisition proposal or the course of any discussions with EMC until such time as further action on the part of Iomega is required, if at all, pursuant to the terms of the ExcelStor Purchase Agreement, nor will it comment upon any rumors with regard to the foregoing.

Read also: EMC Wants to Acquire Iomega for $178 million, with our analysis

Iomega Corporation

EMC Corp.