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EMC considers selling stake in VMware: NY Post

[September 11, 2014]  (Reuters) - Data storage products maker EMC Corp has decided to consider selling its stake in its virtualization software unit, VMware Inc, New York Post reported, citing sources familiar with the situation.

Hewlett-Packard Co is a potential buyer for VMware, a source told the paper. (http://bit.ly/ZhO1lt)

EMC has been resisting pressure from activist investor Elliott Management Corp to spin off VMware, saying that keeping the companies together helps the company win business.

Elliott has invested more than $1 billion in EMC with an aim to push it to spin off VMware, which has a market value of about $41.88 billion.

EMC, which owns about 80 percent of VMware, had bought the company in 2004 for $700 million.

VMware accounted for about 22 percent of EMC's 2013 revenue of $23.2 billion.

EMC may also look to put other assets on sale, another source told the Post.

EMC, VMware and HP did not immediately respond to requests for comment.

Up to Wednesday's close, EMC shares had gained about 12 percent in 12 months, while the S&P 500 Index had risen about 21 percent.

Shares of EMC, which has a market value of $59.86 billion, were up 2 percent at $30.17 in premarket trading.

(Reporting by Soham Chatterjee in Bangalore; Editing by Maju Samuel)

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