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Dell has agreed to buy out its own tracking stock for $21.7bn in a move that will return the sprawling technology company back to public markets five years after its founder took it private.
The deal announced on Monday will give Michael Dell and his financial partner Silver Lake, the tech-focused private equity group, greater control of VMware, the data centre company it already controls.
By taking Dell back on to public markets — after a contentious $25bn buyout five years ago — one of the world’s largest tech companies will have the possibility to manage and reduce its large debt pile.
Under the terms of the deal Dell will exchange each share of its “Class V” tracking stock for 1.3665 shares of Dell Technologies Class C common stock, or at $109 in cash — up to and not exceeding $9bn worth of cash.
The offer, which will give Class V shareholders between 20 and 30 per cent ownership of Dell, represents a 29 per cent premium to the closing price of the tracking stock before the announcement and values VMware equity at $48.4bn.
“Unprecedented data growth is fuelling 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,” said Mr Dell, who currently controls 72 per cent of the company.
“Most importantly, I remain deeply committed to this company and working with our world-class team to build the long-term value of Dell Technologies and its businesses.”
