EMC denies rumours of VMware sale

Data storage and IT giant EMC has categorically denied that it is looking to sell the majority of its stake in cloud software firm VMware.

Sources close to the firm told Re/code that there was "no truth" to the rumours, despite EMC shares rising in value as a result of the news.

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The New York Post originally claimed that EMC was exploring the sale, after it was initially posed by an activist shareholder firm in July. That was when Elliot Management, a firm controlled by billionaire Paul Singer, bought a small stake in the company, and announced it intended to breakup EMC and VMware.

CEO of EMC Joe Tucci, said in July that he was "always open" to a dialogue with shareholders but the company appears determined to maintain its current corporate structure.

It is believed that EMC management has met with Elliot's representatives, but so far no concrete reports have followed the discussions.

Earlier this month, David Goulden, CEO of EMC's Information Infrastructure unit, defended the partnership between his firm and VMware.

"We believe that there are real synergies and real benefits, hard dollar benefits, in having VMware [as part of] EMC, and Pivotal and VMware and RSA in the same company. And we believe, if we separate we would actually destroy value by doing so. It wouldn't be as efficient a mechanism and it wouldn't be as strong a competitor in the marketplace as we are today."

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Elliot Management's view is that EMC shareholders would benefit if the company parted with VMware in a spinout or sale. Elliot does have history of making things happen at the companies it is invested in, so despite the steadfast denial, there could still be changes ahead for EMC.