Friday, April 25, 2008

Iomega terminates agreement with BVI- and Cayman-based ExcelStor Entities

Iomega Corporation, a worldwide leader in innovative storage and network security solutions for small and mid-sized businesses, in December 2007 had entered into a share purchase agreement with Cayman Islands-based ExcelStor Great Wall Technology Limited and ExcelStor Holdings Limited, Chinese companies Shenzhen ExcelStor Technology Limited and Great Wall Technology Company Limited, and British Virgin Islands-based ExcelStor Holdings Limited. During this period of time, Iomega and the selling stockholders were preparing the required filings for obtaining the necessary regulatory and stockholder approvals for the business combination.

However, on April 8, 2008, the board of directors of Iomega terminated the Purchase Agreement with Cayman Islands-, BVI- and China-based companies. In accordance with the terms of the Purchase Agreement, as the Agreement between Iomega, ExcelStor, and the Selling Shareholders is no longer in effect, Iomega has paid the Selling Shareholders a termination fee of US$7.5 million.

Having terminated the Purchase Agreement with the above companies, Iomega entered into an agreement and plan of merger with EMC Corporation. Iomega announced that it has received an unsolicited non-binding indication of interest from EMC Corporation in March, when EMC offered to acquire the outstanding common stock of the company for $3.25 per share, assuming a total of approximately 54.8 mln outstanding shares. Now EMC Corporation will commence a cash tender offer to share purchase at a price of $3.85 in cash, without any interest.