RSA Security negotiating a possible sale; Times report says EMC may buy for $1.8b

RSA Security Inc. of Bedford confirmed this morning that it is negotiating with other companies regarding a potential sale.

The New York Times, citing sources, reported today that Hopkinton data-storage EMC Corp., the state's largest technology company, is competing with at least one other bidder for RSA, which plans to review deal proposals by the end of the week. The Times said the deal would be worth at least $1.8 billion.

"As a policy, we don't comment on rumor or speculation regarding M&A activity," said EMC spokesman Michael Gallant. RSA issued a statement this morning saying it is "currently engaged in negotiations with parties regarding a potential strategic transaction. No definitive agreement has been reached." It said it would have no further comment until its board has approved a transaction and an agreement has been reached.

RSA makes a variety of hardware and software products for computer security. The company's SecureID devices automatically generate random numbers for use as passwords in high-security government and corporate applications. It employs approximately 1,300 people worldwide, a fraction of EMC's total workforce of 26,500.

In 2005, EMC posted a profit of $1.1 billion on revenue of $9.7 billion; RSA's profit totaled $42 million on revenue of $310 million.

EMC has been in an expansionist mode the past several weeks, disclosing plans to spend $500 million over five years to create a research and development center in Shanghai and another $500 million for a research center in India. Last week, the company bought a Newton firm that runs a software research and development lab in Israel.

Shares of RSA rose $2.79, or 14.41 percent, to $22.15 in premarket trading on the INET electronic exchange. Trading has been halted on the Nasdaq Stock Market this morning pending news from the company.

RSA's shares have traded in a range of $10.50 and $21.04 in the past year.

The New York Times said RSA put itself up for sale several months ago. (Globe staff and wire services)