EMC Snubs Investor, Plans to Keep VMware Stake

Despite pressure from another co-owner of VMware, EMC Corp. will hang on to its majority stake in the virtualization giant, according to a new report.

Elliott Management, a hedge fund that bought part of VMware this summer, reportedly has been pressuring EMC to spin off VMware in a move to raise value. But a source told Reuters on Thursday that the storage behemoth has no intention of selling its VMware stake. That followed a New York Post report earlier in the day that said the sale was a real possibility.

“If we separate it, we would actually destroy value,” noted David Goulden, CEO of EMC’s information infrastructure division, speaking at a conference last week.

Elliott Management reps declined comment on the Reuters story.

EMC bought its 80 percent stake of VMware in 2004 for $700 million. It accounts for almost one-quarter of EMC’s revenue.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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