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.
Dell will exchange each share of VMware tracking stock for 1.3665 shares of its Class C common stock, or $109 per share in cash for a total cash consideration of not more than $9 billion. While the tracking stock that would facilitate the change has doubled in value, Michael Dell has previously stated a preference for being a private company - which Dell has been since 2013. The company intends to exchange outstanding V tracking stock for Class C common stock of Dell Technologies or an optional cash choice.
VMWare's board of directors (remember, Dell acquired EMC for $67 billion in 2015) has voted to declare an $11 billion cash dividend pro rata to all VMWare stockholders.
When Dell Inc. closed the biggest technology merger in history almost two years ago, the company's namesake founder said the new entity would enjoy its freedom away from the glare of Wall Street and its obsession with quarterly earnings.
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.
Anyone that follows the goings on of Dell would have to wonder how this affects VMware.
DVMT has a market capitalization of $17 billion, while that of VMware is about $60 billion after their stock prices increased this year on the possibility of a deal, according to the paper. EMC owned the majority stake in VMware, which Dell inherited.
"Unprecedented data growth is fueling the digital era of IT, and we are uniquely positioned with our portfolio of technologies and services to enable the digital, IT, security and workforce transformations of our customers", he said.
Dell has had an interesting track record, as far as its position private and public, over its 34 years of operation. VMware specializes in virtualization, a technology which allows multiple systems and applications to run at the same time on the same server, which can cut companies' IT costs.
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.