EMC asks for 'go-shop' provision in its acquisition deal with Dell

EMC asks for 'go-shop' provision in its acquisition deal with Dell

According to reports citing unidentified sources, data storage firm EMC Corp will -- on Monday, October 12 -- unveil an agreement related to its acquisition deal with PC manufacturer Dell Inc.

Going by the details shared by unidentified people familiar with the proceedings at EMC, the company has sought the inclusion of a 'go-shop' provision in the merger agreement it has worked out with Dell. As a result of the 'go-shop' provision, EMC will be able to seek out other suitors even after its acquisition deal with Dell.

The sources have revealed that, with the 'go-shop' provision included in EMC's acquisition deal with Dell, it will be possible for EMC to solicit bids from other companies. In case EMC is able to strike a deal with some other company, it will pay a discounted breakup fee to Dell.

EMC's decision to include the 'go-shop' provision in its acquisition deal with Dell implies that EMC CEO Joseph Tucci is apparently trying to effectively convince company's shareholders that the acquisition agreement signed with Dell is the best possible outcome for them.

About the EMC's deal to be acquired by Dell, Matt McIlwain -- a managing director at Madrona Venture Group -- said that the EMC/Dell merger "bodes well for the next generation of innovator; " and added: "Legacy tech companies have little alternative than to use financial engineering to keep shareholders happy in an era of fundamental technology disruption."

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