July 30, 2008 / 6:12 PM / 12 years ago

EMC shares rise on speculation it may be acquired

BOSTON (Reuters) - EMC Corp EMC.N shares rose as much as 6.3 percent on Wednesday on market speculation that the world’s largest maker of corporate storage equipment could be bought.

EMC Chief Executive Joe Tucci (R) speaks at a news briefing in Washington February 6, 2008. REUTERS/Joshua Roberts

EMC spokesman Dave Farmer declined comment, saying the company never responds to market rumors or speculation.

Jefferies & Co analyst Bill Choi said the speculation surfaced late Wednesday morning, but that he did not know what caused it to emerge.

“I am not sure I know anything that supports this rumor. It comes back now and then. The last time it was in full force was in May,” Choi said.

Choi and Pacific Growth Equities analyst Kaushik Roy said the most likely company to be interested in buying EMC would be Cisco Systems Inc (CSCO.O).

A Cisco spokesman could not immediately be reached for comment.

Shares of EMC rose as high as $14.92 in trade on the New York Stock Exchange, before retreating to $14.75 in afternoon trading. Shares of California-based Cisco fell 1.3 percent to $22.12 on Nasdaq.

In the options market, roughly 217,000 calls traded in EMC compared to 57,000 puts in the first half of the session. That is three times the normal option volume, according to option analytics firm Trade Alert.

William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York, said that while renewed speculation of a possible sale of EMC had boosted trading of the company’s options, he is skeptical that a deal is in the works.

“People are always speculating on the next company to be taken over...This rumor regarding EMC has been around for a long time.”

Reporting by Jim Finkle in Boston, Eric Auchard in San Francisco and Doris Frankel in Chicago; Editing by Derek Caney

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