Rumors of a possible EMC/VMW acquisition by Cisco has resurfaced.
virtualization.info has discovered some circumstantial evidence which combined could mean that something huge is about to go down.
- Cisco is raising cash for possible acquisitions, as reported earlier today.
- Yesterday’s SEC filing is evidence that someone is hoarding VMware shares.
- At Cisco Networkers 2009 a tighter Cisco/VMware/EMC strategy was evident.
Monday’s SEC filings shows that Cisco posted a prospectus on raising $4 billion in senior bonds. The book building is run by all the major investment banks and is closing on February 17.
Cisco must be really confident for such a major issuance in these market conditions, but Standard & Poors is giving the senior unsecured notes an A+ rating with a stable outlook.
Cisco will use $500 million of the $4 billion to repay short term debt. When combined with sizeable cash holdings, this leaves them with with $4.7 billion in cash at the US parent company. According to CNET that amount excluded cash holdings at subsidiaries overseas.
That is not enough for a full takeover as the market cap of EMC is around $25 billion and VMware about $10.5 billion, but a possible stock swap with a cash settlement sprinkled on top could certainly interest EMC investors (Cisco currently hold 1.7% of the total outstanding stock).





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