EMC Jumps After Report of Deal Involving Buyout by VMware

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EMC Corp. shares rose 3.2 percent after Re/code reported that the storage company was considering a deal that would involve a buyout by subsidiary VMware Inc.

EMC’s board is considering the steps as part of a “wide-ranging strategic review of its operations and as a partial response to pressure from an activist shareholder,” the technology news website said Wednesday, citing unidentified sources.

VMware shares rose yesterday after Re/code reported that parent EMC could acquire the roughly 20 percent of VMware shares it doesn’t already own. Elliott Management Corp. is pressing EMC to spin off the faster-growing unit, saying the parent is undervalued and that there’s too much overlap between the companies. Today’s news suggests the same goal could be accomplished by having VMware buy EMC.

The shares of EMC climbed to $26.85, leaving them down 9.7 percent this year. VMware’s stock fell 5.2 to $86.22 at the close in New York today.

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