In Dell, EMC $50B Takeover Deal, Activist Elliott Could Win Again

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This post originally appeared at The Var Guy

A year ago, reports surfaced that EMC had huddled with HP sporadically for about a year to discuss merger options and done the same with Dell, which at the time was seen as a longshot in any takeover deal.

But a deal with Dell apparently is back on the table and it’s potentially a doozie. According to reports, Dell and private-equity firm Silver Lake are nearing a conclusion to talks that will see the computer maker buyout the storage giant for some $50 billion.

Should a deal go through, it would be yet another victory for activist investor Elliott Management, which took a 2 percent stake in EMC valued at about $1 billion more than a year ago and has been pressuring EMC to sell of its VMware and Pivotal positions and alter its federation model to improve the company’s earnings performance.

Last January, EMC and Elliott agreed to a temporary standstill with a deal to add two mutually acceptable directors to the storage giant’s board.

Elliott’s history includes taking large positions in Blue Coat Systems, BMC Software, Compuware, NetApp, Novell, and Riverbed and, in some cases, paving the way for private equity firm Thoma Bravo to step in and buy out some of those companies and in others pressing for selloffs or management changes to boost shareholder value.

Elliott owns a 9 percent stake in Juniper, which late last February named two independent directors to its board supported by the activist investor.

With a $50 billion market value, more than $23 billion in annual sales and some 60,000 employees worldwide, EMC, whose federated business model spans data storage, virtualization and software development, would be a whale for any IT company to swallow whole.

Earlier talks between EMC and HP ultimately broke down over concerns on both companies’ part that shareholders would nix any deal. It will be interesting to see if that happens here with Dell considering how much influence Elliott now commands.

This first ran at http://thevarguy.com/information-technology-merger-and-acquistion-news/100815/dell-emc-50-billion-takeover-deal-activist-elliott