Wednesday 23 January 2019

Dell wins shareholder vote to return to public markets

Dell founder and chief executive Michael Dell Photo: Adrian Weckler
Dell founder and chief executive Michael Dell Photo: Adrian Weckler

Nico Grant

Dell has won a shareholder vote to return to public markets, putting founder Michael Dell on the winning side of a transformative transaction that polarised investors for the second time in five years.

The world's largest private technology company yesterday secured more than 61pc of tracking stock DVMT's unaffiliated shareholders. Of those who cast a ballot, 89pc voted in favour. DVMT acts as a proxy for Dell's stake in software maker VMware.

Dell will buy out DVMT in a cash and share-swap deal that values DVMT's market capitalisation at $23.9bn (€21.1bn). The computer giant said it will list on the New York Stock Exchange as soon as December 28 under the ticker DELL.

After going private in one of the biggest leveraged buyouts ever, Dell will relist as a financially stronger and more diverse leader in computer equipment and software, though more burdened by debt.

The move will help simplify a tangled corporate structure that holds together a tech empire ranging from servers to security software and give the company greater flexibility to raise capital, boost its value and pursue stock-based acquisitions.

It will also allow key investor Silver Lake, which helped take Dell private in 2013 in a deal worth about $24bn, to make its stake more liquid. The path to the vote hasn't been easy, as investors baulked at Dell's initial offer and forced it to sweeten the bid to get the transaction over the finish line. Dell increased its offer to about $120 a share in cash and stock, from $109 - financed by Dell and a special dividend from VMware. "With this vote, we are simplifying Dell Technologies' capital structure and aligning the interests of our investors," Michael Dell, the CEO of the company he founded in his dorm room, said in a statement.

The offer is a 14pc premium to DVMT shares, which rose 1.3pc, to $105.44. VMware's stock climbed 2.4pc after settling at $163.36 on Monday.

Bloomberg

Irish Independent

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