Activist investor Elliott Management is trying to get data storage products outfit EMC to spin off its VMware virtualization software unit or merge with someone else.
The outfit penned a 13-page letter to the company’s board which was signed by portfolio manager Jesse Cohn and warned that EMC’s structure of combining several businesses obscured its enormous value.
Elliott, which has $25 billion under management, owns a 2.2 percent stake in EMC and said it was writing a letter to help inform EMC’s board on its “current review process” of how to maximize long-term value at EMC.
EMC’s “federation strategy” comprises a core data-storage unit, a virtualization software unit VMware, enterprise security business RSA and cloud-computing software maker Pivotal.
EMC held merger talks with HP recently that broke down. Elliott said the acquisition interest in EMC’s assets on the part of several large companies that make strategic sense.
So far, EMC has publicly said it plans to keep its company together. But pressure is building as other technology companies recently have been spinning off operations in an attempt to become more agile and capitalize on faster-growing businesses.
