Jan 12 (Reuters) - EMC said on Monday that activist investor Elliott Management Corp will vote for EMC’s proposed directors as part of a standstill agreement with the data storage company prohibiting the hedge fund from agitating the company until September.
Since October 2014, Elliott has been publicly pushing data storage maker EMC to spin off its VMware software virtualization unit or pursue other merger opportunities. Elliott owns a 2.2 percent stake in EMC.
EMC has so far resisted Elliott’s demands but the news on Monday in a press release signaled the hedge fund and the company were working together and would avoid a battle during the upcoming proxy season.
Elliott helped EMC choose the new directors appointed on Monday. Both directors, Jose Almeida, current chairman and CEO of medical device maker Covidien, and Donald Carty, retired chairman and CEO of AMR Corporation and American Airlines and a former Dell Inc executive, have extensive deal experience and will join the board immediately.
As part of the agreement which lasts until September, Elliott must vote for EMC’s proposed directors this year, and will have a limit of how much EMC stock it can buy as well as other provisions, according to people familiar with the matter.
Jesse Cohn, portfolio manager at Elliott Management, said in a statement “Both Joe and Don are strong and experienced executives, and we believe they will bring invaluable perspectives to the board’s ongoing review of EMC’s strategic direction.”
EMC shares were trading 43 cents lower, down 1.4 percent at $29.25 on Monday. (Reporting by Liana B. Baker; Editing by Nick Zieminski)