Dell Technologies Inc is nearing a deal that would allow the closely held technology giant to trade publicly again, by combining with a stock that tracks its stake in software maker VMware Inc, the Wall Street Journal and other media reported on Sunday, citing people familiar with the matter.
Dell, the world’s largest private technology company, planned to announce as soon as yesterday that it was planning a share swap to acquire the DVMT tracking stock, the Journal said.
DVMT is valued at about US$17 billion, while VMware’s market cap is about US$60 billion.
Dell could not be reached for comment and VMware declined to comment.
Founder Michael Dell has considered a variety of options to streamline his multicompany tech empire and help the business manage a massive debt load. The current structure of Dell’s companies is tangled.
Dell took the company private for about US$25 billion in 2013 with investment firm Silver Lake. The tracking stock was created to help Dell finance its US$67 billion purchase of data storage company EMC in 2016, the largest technology takeover ever at the time.
The deal was mostly cash, but the rest was paid through the new security linked to part of EMC’s interest in VMware.
EMC owned a controlling stake in VMware and the rest of VMware is publicly traded, as is the DVMT tracking stock.
DVMT has almost doubled since the stock was issued, closing at US$84.58 on Friday.
Palo Alto, California-based VMware makes virtualization software that helps maximize workloads on servers, as well as cloud and device management tools.
Round Rock, Texas-based Dell will offer DVMT shareholders “significantly” more of its privately held shares than cash, CNBC reported, citing people familiar with the matter.
DVMT will be acquired at a premium in line with standard transactions and VMware will pay a US$9 billion dividend to DVMT shareholders as part of the agreement, CNBC said.
The transaction would give Dell more direct influence over VMware’s future, it added.
VMware is more than 80 percent controlled by holders of the Dell tracking stock and Dell’s DHI shareholders — Michael Dell and Silver Lake.
Dell, which missed out on the cloud-computing wave, has tried to develop next-generation solutions to enable the Internet of Things.
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