Activist investor Elliot Management has given EMC just under three weeks to respond to its demands about the future of the company, according to sources.
The investor has been lobbying EMC to break up its unusual Federation model,which includes EMC, VMware, Pivotal and RSA, for a while. According to Reuters, it has given the storage giant a deadline of 21 October – when it reports its latest results to Wall Street – to respond.
Since the idea that EMC might split itself up first surfaced, the rumour mill has been in full swing, with a number of acquisition variations being suggested. Some of the reported possible scenarios include: EMC selling VMware; EMC acquiring the whole of VMware; EMC selling VMware to HP; and even EMC being acquired whole by HP or Dell.
In January, EMC revealed in a filing with the Securities and Exchange Commission that Elliot has agreed to a standstill period until the end of September. The sources speaking to Reuters said the new deadline was put in place by Elliot in light of the standstill period coming to an end.
Last month, EMC Information Infrastructure chief executive David Goulden was asked by analysts to set the record straight about the future of EMC.
He said: What the board is focused upon for most of this year is how we optimise the Federation to create better growth and therefore better value, and because we said we're looking out at alternatives, by definition, there is a huge amount of speculation.
"So the open question is, given where we are and how we built the business up – and the Federation has obviously been a great vehicle for us so far – what is the way to take it to the next level? Not surprisingly, the board is going through a thoughtful process; they're looking at all the alternatives, but doing it very thoughtfully and in a very timely way again with a view as to how we optimise and enhance value, building on the strengths that we have so far."
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