A staunch denial from EMC, the data storage and IT giant, has put to rest all speculation that it intended to sell of a majority of share in the cloud software company VMware.
The basis for denial arose after The New York Post had reported that EMC was finding a suitable buyer for its stake in VMware, when Elliot Management controlled by billionaire Paul Singer had bought a small stake in the company and announced its intentions to separate VMware from EMC.
In defence of EMC retaining its stake in VMware, David Goulden, CEO of EMC’s Information Infrastructure unit had said in July that the company believes that “there are real synergies and real benefits, hard dollar benefits, in having VMware EMC, and Pivotal and VMware and RSA in the same company,” and that if separated that could “actually destroy value.”
He added that “it wouldn’t be as efficient a mechanism and it wouldn’t be as strong a competitor in the marketplace as we are today.”
Managers at Elliot Management however seem to have a different view altogether; they are of the view that separating the 2 companies will help shareholders. EMC has a reputation for showing results in companies in which it had made investments. Denials of a breakup apart, market watchers say that there is great scope for changes in the days ahead.
