EMC: 'Anything could happen' due to go-shop clause

Joe Tucci says clause is in place to ensure best value for shareholders

EMC's chief executive Joe Tucci has said "anything could happen" regarding its merger with Dell thanks to a "go-shop" clause which means a higher bid could technically be considered. But he suggested the sheer size of the deal would make this unlikely.

Dell announced plans to acquire EMC on Monday for $67bn. In a town hall meeting with VMware staff about the merger on Monday - a transcript of which has today been made available - Tucci moved to answer fears from staff that they could be "having this meeting again in two months".

"When you do this kind of deal right, the law of the land says you've got to make sure that you did the best deal for your shareholders, as they're the owner the company, right?" Tucci told staff.

"So what [the] provision basically says is Dell's saying that ‘ok, that's the law of land - I'm going to encourage you to go shop fast. Let's see if there is anybody else interested.'

"It's so anything could happen. And I don't know the answer to your question but you [would] have to significantly top, you know, $67.1bn bid, right?"

When questioned on whether EMC would settle for a larger bid than Dell's, Tucci said: "Well our bankers are obligated to actively make sure that there's nobody out there that thinks this is worth a lot more."

VMware chief executive Pat Gelsinger chimed in and said: "Shareholders - have they gotten the best deal, right? Ultimately that's what we have to be able to say at the end of the deal. And a deal of this magnitude is just mind boggling. So to think somebody else is going to top it - wow - but you have to go look right at that level."

Tucci said that although VMware will remain public, taking EMC private is a great plan because it will mean things can move faster.

"Michael [Dell] told me a story last time he came to see me: he was flying from Boston and he said he got a good nap [on the flight] and he completed his board meeting," he said. "He has very good electronics on his plane so he conducted a board meeting on the plane that lasted an hour and 10 minutes. I said, ‘I can't get the board members to sit down for an hour and ten minutes'."