Dell to return to NYSE after five-year absence

WASHINGTON: Personal computer manufacturer Dell will return to the New York Stock Exchange (NYSE) after five years of being a private company, the firm announced on Monday.

The company’s listing on the NYSE is the result of a complex share swap agreement with VMware, the software company that took over Dell in 2016.

In the US$21.7 billion (RM87.7 billion) deal, Dell is offering to exchange DVMT trading stock for 1.3665 common shares, or 109 dollars per share. Dell said the price represents a 29% premium to the DVMT closing price and that the switch gives shareholders “the opportunity to participate in Dell Technologies” in the future.

As part of the deal, VMware will pay a one-time dividend worth US$11 billion to shareholders. Dell will receive about US$9 billion of the dividend.

The company said it intends to use the money to finance the cash payment to DVMT shareholders and to pay off debt with the remainder.

The move will allow Dell to trade publicly without going through an initial public offering. This could help the company manage its large debt load of more than US$50 billion, as the tax code limits the amount of interest it can deduct.

Founder Michael Dell, who owns 72% of Dell Technologies’ common stock, will continue to lead the company with a focus on long-term results. Dell and a group of investors purchased the company in 2013 and took it off the market.

The transaction needs the approval of DVMT shareholders, but is expected to close in the fourth quarter. – dpa