Dell subsuming tracking stock

AUSTIN: Dell Technologies Inc, the world’s largest private technology company, announced plans to trade publicly again, entering a new stage of a multi-year turnaround plan.

The tech giant would return to public markets by subsuming its tracking stock, DVMT, in a cash and share-swap deal, said Round Rock, Texas-based Dell in a filing yesterday. The shares, currently worth about US$17 billion (RM68.68 billion), are meant to mirror the value of software maker VMware Inc, in which Dell has a controlling stake.

As part of the deal, VMware will pay DVMT shareholders an US$11 billion special cash dividend and Dell will offer more shares — or cash — to make up the difference, giving a total deal size of US$21.7 billion. Dell Technologies Class C common stock will become publicly listed on the New York Stock Exchange.

Chief executive officer Michael Dell has considered a variety of options to streamline his multicompany tech empire and help the business manage a massive debt load.

Bloomberg first reported earlier this year that Dell was considering subsuming the tracking stock.

Holders of DVMT shares — also known as Dell Technologies Class V — will have the option to either swap their shares for Dell’s Class C common stock, or take US$109 in cash per Class V share.

The offer is a 29 per cent premium to Class V’s closing price on Friday. The deal is expected to close in the fourth quarter of this year.