EMC: No rival offers, so we're flying solo with Dell

'Go shop' period expires, so it's just the Michael and Joe show

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Dell’s proposed $67bn acquisition of EMC edged ever closer this weekend after the storage titan confirmed the end of the so-called "go shop" period that allowed rivals bidders to enter the fray.

The biggest deal in tech history was first announced in October when privately-owned Dell stated it will pay EMC shareholders $33.15 per share in total.

In the intervening period, the companies' reps had “solicited” alternative acquisition proposals but none were received or “deemed to constitute a Superior Proposal to the existing merger agreement”.

“The transaction remains scheduled to close between the months of May and October 2016, subject to customary conditions, including receipt of required regulatory and EMC stockholder approval,” EMC stated.

This is assuming that Dell’s legal eagles and accountants can find a way around the potential tax issues that are said to face the company, related to the structure of the buy.

With the go shop period expiring, C-level execs at EMC, Dell, MSD Partner and Silver Lake are to “pursue the combination” of the organisations.

“Once completed, the new business promises to be an enterprise powerhouse, with highly complementary routes to market, that will help customers drive their digital transformations and journeys to the hybrid cloud”,” EMC said.

EMC further claimed that away from the spotlight of Wall Street, “under Dell’s privately-controlled structure”, the enlarged entity will have “freedom to innovate and invest for long-term leadership ... while building out an aligned global ecosystem of partners”.

Under the terms of the acquisition, Dell will take on almost $50bn of debt and is already thinking of selling off non-core assets to help alleviate the financial burden, with four candidates under consideration including Quest Software, SonicWall, Rapid Recovery (formerly AppAssure) and Perot Systems.

EMC has promised “minimal disruption” to its product line when it becomes part of the House of Dell, but integration of two huge beasts is bound to result in some upheaval, whether to the workforces, the product sets and indeed the channel partners.

As for customers, some think the idea makes sense while others voiced concern in another survey with more than 40 per cent still seeing Dell as a PC supplier and roughly the same amount again claiming the acquisition was out of tune with their enterprise concerns.

HP pulled off a massive separation of the PC and printer businesses from the rest of the portfolio with minimal disruption, but with an acquisition of this size, the pitfalls seem even greater.

Perhaps Dell and EMC will surprise everyone too. Or, perhaps not. ®


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