Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

EMC to pay Dell $2 billion as breakup fee in go-shop period

Published 13/10/2015, 14:27
© Reuters. Dell logo is pictured on the front of a computer in this photo illustration in the Manhattan borough of New York
CSCO
-
ORCL
-
IBM
-
EMC_old
-
HPQ
-

(Reuters) - EMC Corp (N:EMC) said it would pay Dell Inc [DI.UL] $2 billion (1.31 billion pounds) if its about $67 billion deal with the world's no. 3 computer maker is terminated for a "superior proposal" before Dec. 12.

The record merger agreement announced on Monday included a 60-day 'go-shop' provision that allows EMC to solicit bids from other parties and pay a discounted breakup fee to Dell if a deal is made with another company.

EMC said on Tuesday it will pay $2.5 billion if it opts for a superior offer after the go-shop period.

EMC will pay an additional $2.5 billion if it enters into a deal with another company within 12 months of terminating the deal with Dell.

While IBM Corp (N:IBM), Cisco Systems Inc (O:CSCO), Oracle Corp (N:ORCL) and Hewlett-Packard Co (N:HPQ) could be potential suitors for EMC, the chances of them challenging Dell with a rival offer are slim, people familiar with the matter have told Reuters.

Tuesday's agreement also requires Dell to pay EMC a termination fee of $4 billion under specified circumstances and in certain instances, an alternative termination fee of $6 billion, EMC said in a regulatory filing. (http://1.usa.gov/1MonKTB)

© Reuters. Dell logo is pictured on the front of a computer in this photo illustration in the Manhattan borough of New York

EMC shares were down 1.2 percent at $28 in premarket trading on Tuesday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.