News
News Categories

Dell could become a public company again by selling itself to VMware

By Koh Wanzi - on 30 Jan 2018, 11:51am

Dell could become a public company again by selling itself to VMware

Image Source: Engadget

Dell’s story could be about to come a full circle. It has been a privately run firm for over 4 years, but it may be about to go public again, although not necessarily by the most straightforward means.

According to sources cited by CNBC, VMware, which Dell already owns 80 per cent of, could buy Dell in a huge reverse merger, thus allowing the company to be traded publicly without having to launch a new stock offering.

This would also help Dell pay off some of its roughly US$50 billion debt and allow investors who backed Dell’s move to go private in 2013 to profit.

Dell acquired a majority stake in VMware following its US$67 billion acquisition of EMC Corporation in 2015, although the former remained an independent, publicly traded entity.

If VMware does buy Dell, it would issue shares to Michael Dell and Silver Lake, the private owners of Dell. They could then sell the shares on the public market, and in this way profit.

While Dell’s exact valuation isn’t known because it is still a private company, a VMware acquisition would top what Dell paid for EMC in theory, making it the largest technology deal to date.

That said, Dell has other options if it wants to go public again, such as via a more traditional initial public offering. It could also pursue other takeovers or buy the remaining 20 per cent stake in VMware, but CNBC’s sources say that it is unlikely to sell the company outright or even its stake in VMware.

Source: CNBC

Join HWZ's Telegram channel here and catch all the latest tech news!
Our articles may contain affiliate links. If you buy through these links, we may earn a small commission.