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EMC Up on Oracle Buyout Rumors

Shares of EMC jumped after a report said Oracle might acquire the storage equipment maker.

NEW YORK (TheStreet) -- Shares of EMC (EMC) jumped as high as 5% in morning trading Thursday, after a report said Oracle (ORCL) - Get Oracle Corporation Report could acquire the storage equipment maker.

Rumors began circulating after a Citigroup analyst report issued Wednesday pegged EMC -- as well as

BMC Software

(BMC)

,

Cerner

(CERN) - Get Cerner Corporation Report

,

F5

(FFIV) - Get F5 Networks, Inc. Report

and

Mellanox

(MLNX) - Get Mellanox Technologies, Ltd. Report

-- as potential targets for Oracle. EMC is a "long shot," the report said.

While a deal with Oracle is possible because of EMC's attractive storage business, EMC's 80% stake in virtualization software company

VMWare

(VMW) - Get VMware, Inc. Class A Report

might add complications, Avian Securities analyst Matt Bryson said. EMC has traditionally taken a "hands off" approach with VMWare, and Oracle "might have a hard time with

that." Oracle has also made investments to build up its own virtualization platform, and VMware would be "a dead expense," he said.

If Oracle decided to buy EMC, it might consider divesting VMWare, Bryson added.

Bryson also deemed other rumors circulating about a combination between

Microsoft

TheStreet Recommends

(MSFT) - Get Microsoft Corporation (MSFT) Report

and EMC as implausible. "Could Microsoft be interested in VMware?" he said. "That's more interesting, but not EMC as a whole."

Data storage companies have already seen a string of buyouts in the last few months, including

HP's

(HPQ) - Get HP Inc. (HPQ) Report

$2.35 billion acquisition of

3Par

in September, and

IBM's

(IBM) - Get International Business Machines (IBM) Report

purchase of

Neteeza

for $1.7 billion.

EMC and Oracle could not be reached for immediate comment.

In midday trading, EMC was up 3.74% to $21.06 and Oracle was down 1.4% to $28.20.

--Written by Olivia Oran in New York.

>To follow the writer on Twitter, go to

http://twitter.com/ozoran

.

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