Five Years After Going Private, Dell Is Going Public Again

Image Credit Johnathan Weiss  Shutterstock

The shares, worth about $17 billion as of Friday, were created to mirror the value of software maker VMware Inc., in which Dell has a controlling stake.

VMware traded up as much as 8.2 percent and Dell Technologies 12 percent on the news.

The elimination of the tracking stock is aimed at simplifying Dell's complex ownership structure without overburdening its balance sheet, which bears around $50 billion in debt. Dell founder Michael Dell and investment firm Silver Lake took Dell private in a leveraged buyout in 2013 for about $25 billion.

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.

Dell Technologies' share of the dividend will be approximately US$9 billion which the company said it intends to use to finance the cash payment to DVMT shareholders with the remainder, if any, being used to pay down debt.

More news: Brazil beat rivals Mexico in last 16

It acquired the data storage group EMC in 2016 for a whopping Dollars 67 billion and is a major player in software, security and cloud computing in addition to its PC business.

The transaction is expected to close in the fourth quarter. The company leads the market in server shipments and claimed the top spot in U.S. PC shipments in the first quarter, according to Gartner. Now, the company is once again planning to go public. He has tried to revamp the company as a cloud player by offering customers software from a suite of smaller companies in which it's invested, in a bid to take back sales from Amazon.com Inc. and Microsoft Corp.

After the deal, VMware shareholders will own between 20.8 percent and 31 percent of Dell depending on how many investors opt for cash, Dell said.

When going private, Michael Dell said the company was returning to the "entrepreneurial spirit" on which it was founded.

"Over the last five months, with the assistance of our independent financial and legal advisors, we have conducted a thorough evaluation of a number of alternatives to maximize stockholder value", said a special committee of VMware directors.

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