Intel to Divest VMware Stake
Intel has announced plans to sell half of its stake in virtualization applications provider VMware. Intel had acquired 9.5 million shares in VMware for $218.5m in August 2007 before its planned IPO.
In a filing with the US Securities and Exchange Commission, Intel disclosed that it has already sold 1 million shares to Cisco Systems and EMC and plans to sell another 3.75 million VMware shares in the open market.
Meanwhile, Cisco Systems announced plans to buy an additional 500,000 shares in VMware for $13.3m from Intel. The company had initially invested $150m in VMware before its initial public offering. With the completion of the share purchase, Cisco will own 1.7% of VMware’s common stock. The company also owns a 7% share of VMware’s Class A stock.
Last month, VMware reported a 29% increase in net income to $83m for the third quarter 2008, compared to $65m in the year-ago quarter, on revenue up 32% at $472m.