Dell makes move to go public again after months-long review

Share

Michael Dell, who now owns 72 per cent of Dell Technologies common shares, struck a deal with the private equity firm Silver Lake to take the company private in 2013 in an effort to reorganize without pressure from public shareholders. The holders could exchange their tracking stock for shares in Dell, Class C Common Stock at a 1:1.3665 ratio, or $109/share in cash.

Dell founder Michael Dell and investment firm Silver Lake had taken Dell Technologies private in 2013, seeking a freer range of movement that comes with more distance from Wall Street and investors.

At the weekend, the WSJ reported the possibility that Dell would attempt to swap privately held shares in itself with the "tracking stock" it created when buying EMC - and the * a target="_blank" href="https://searchwww.sec.gov/EDGARFSClient/jsp/EDGAR_MainAccess.jsp?search_text=*&sort=Date&formType=1&isAdv=true&stemming=true&numResults=10&queryCo=Dell%20Technologies&numResults=10" *SEC filing and a Dell missive have just confirmed the news.

Now, in a complex proposed transaction, VMware will pay an $11bn special dividend to all its shareholders, meaning DVMT shareholders will receive a pro-rata share of some $9bn.

"We are grateful to Michael and his management team at Dell Technologies and VMware for their extraordinary performance that has preceded this transaction, which will enable the company to continue on its accelerating growth trajectory", said Egon Durban, managing partner and managing director of Silver Lake. Until now, investors have gained exposure to Dell by purchasing shadows of shadows of the company.

At time of publication, Dell was trading up 7.7 percent at $91.10, and VMware was up 5.4 percent at $155.

Earlier this year, Dell Technologies said it was undergoing a significant strategic review and might enter the public sphere again, while potentially buying the rest of business software provider VMware that it didn't already own. EMC owned the majority stake in VMware, which Dell inherited.

Dell has had an interesting track record, as far as its position private and public, over its 34 years of operation.

His strategy is in sharp contrast to that of rival HP Inc, which separated in 2016 from Hewlett Packard Enterprise Co, based on the reasoning that having two technology companies focusing separately on hardware and services would make them more nimble.

Dell said in its most recent quarter it recorded revenue of $21.4 billion, up 19% year-over-year, and over the past 12 months the company generated $82.4 billion of revenue with a net loss of $2.3 billion.

Dell, onetime leader in personal computers and tech industry stalwart, said today it will become publicly traded five years after a contentious private equity buyout.

Share