Cisco says not in big deal talks; EMC shares fall

NEW YORK (Reuters) - Cisco Systems Inc CSCO.O is not in deal talks with any big companies, Chief Executive John Chambers said on Wednesday when asked if he is interested in buying storage giant EMC Corp EMC.N.

EMC shares fell as much as 5.4 percent after Chambers appeared to rule out a deal with the company any time soon. Trading in EMC options also picked up after the comment, which he made in an interview broadcast on cable news channel CNBC.

“We don’t have any negotiations with any large companies at this time” Chambers told CNBC.

Chambers said that although he would "never say never," he noted that Cisco was focused on small and medium-sized acquisitions, although it likes to forge partnerships with companies as big as Microsoft Corp MSFT.O or EMC, the world's biggest maker of corporate storage products.

On July 30, EMC shares had risen as much as 6 percent on market speculation that it could be bought. At the time analysts had said the most likely suitor could be Cisco.

EMC shares were down 73 cents at $14.21 in morning New York Stock Exchange trade after falling as low as $14.13. Cisco shares rose $1.34, or 6 percent, to $23.99

In the options market, traders appeared to be bailing out of their EMC call positions, giving the right to buy the stock at a given price and time, analysts said. That suggests they were less convinced that the storage giant will be acquired than they were a week ago, the analysts said.

“People who were speculating that EMC might be acquired by Cisco are getting out of the stock, selling their call options and even buying some put options,” said William Lefkowitz, options specialist at brokerage firm vFinance Investments in New York

Joe Kinahan, chief derivatives strategist at brokerage firm thinkorswim Inc, said that traders were selling August $15 calls, apparently in an effort to close out their bullish positions.

Reporting by Sinead Carew, Jim Finkle and Doris Frankel; Editing by Lisa Von Ahn and Derek Caney