UPDATE 1-Iomega to enter talks with EMC after sweetened offer

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March 17 (Reuters) - Iomega Corp IOM.N said it was prepared to enter into talks with EMC Corp (EMC.N: Quote, Profile, Research, Stock Buzz) after the suitor sweetened its offer to buy the computer storage provider by about 15 percent, or $27.4 million.

EMC's new offer values Iomega, known for its Zip drives, at $3.75 a share, or $205.5 million. Shares of Iomega, whose products include network-attached storage products, external hard drives and removable storage technology, rose 9 percent to $3.55 in morning trade on the New York Stock Exchange.

Iomega's board will be evaluating how EMC's offer compares with a merger deal it had in the making with China's ExcelStor.

Last December, Iomega signed a merger deal with a unit of China's Great Wall Technology Co Ltd (0074.HK: Quote, Profile, Research, Stock Buzz), ExcelStor Group, agreeing to issue some 84 million shares in exchange for all outstanding ExcelStor common stock.

When EMC first offered $3.25 a share, Iomega rejected the offer, saying the bid was not superior to the ExcelStor deal. (Reporting by John Tilak in Bangalore; Editing Bernard Orr)