Dell Technologies Announces Class V VMware Tracking Stock exchange for stock or cash

July 2, 2018 – 8:05 am
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Dell Technologies Announces Class V VMware Tracking Stock exchange for stock or cash

Dell Technologies Announces Class V VMware Tracking Stock exchange for stock or cash

Dell Technologies Announces Class V VMware Tracking Stock exchange for stock or cash.

Dell Technologies Announces Class V VMware Tracking Stock exchange for stock or cash
Image via Dell Technologies

Summary of Dell transaction announcement includes:

  • VMware declares an $11 Billion USD cash dividend pro rata to all VMware stock holders.
  • Given ownership percentage of VMware, Dell Technologies will receive approximately $9 Billion USD cash dividend.
  • Dell plans to list its Class C common stock shares on the New York Stock Exchange (NYSE).
  • Dell plans to use the VMware dividend proceeds to fund cash consideration to be paid to Class V (tracking stock) shareholders.
  • For each Class V share (e.g. VMware tracking stock) shareholders can choose to receive:

    1.3665 shares of Dell Technologies Class C common stock, or
    $109 in cash per DVMT (Class V share) a 29% premium per share

Dell Announces Class V VMware Tracking Stock exchange for stock or cash
Image via Dell Technologies

Additional interest points of this transaction include:

  • Transaction expected to close Q4 CY2018, subject to Class V shareholder approval.
  • VMware maintains its independence as a separate publicly traded company.
  • Dell Technologies maintains its 81% ownership of VMware common stock
    Dell Technologies Class V (DVMT) shareholders will own 20.8% to 31.0% of Dell Class C (depending on cash election amounts).
  • Streamline Dell capital and ownership structure.
  • Establishes a public security (stock) in global end to end data infrastructure provider (e.g. Dell Technologies Stock on NYSE).
  • Enables financial flexibility for future strategic initiatives

Dell Announces Class V VMware Tracking Stock exchange for stock or cash
Image via Dell Technologies

Michael Dell and Silver Lake Continued Ownership

As part of this transaction, both Michael Dell and Silver Lake partners announce commitment to Dell Technologies. Michael Dell will continue to serve as Chairman and CEO, along with a committed stockholder beneficially owning between about 47% to 54% of Dell Technologies on a fully diluted basis. Silver Lake equity partners, an investor in Dell will continue its long-term partnership with Michael Dell beneficially owning between about 16%-18% of Dell Technologies on a fully diluted basis.

Where to learn more

Learn more about Dell Technologies, VMware, Data Infrastructures and related topics via the following links:

Additional learning experiences along with common questions (and answers), as well as tips can be found in Software Defined Data Infrastructure Essentials book.

Software Defined Data Infrastructure Essentials Book SDDC

What this all means

This announcement enables Dell to streamline its financial structure, while providing VMware shareholder with a dividend value. In addition, this Dell Technologies announcement puts to rest industry discussions of what will Michael Dell along with Dell Technologies and VMware do in the future. Speaking of the future, this transaction could also page the wave for future investment or acquisitions by Dell and/or VMware. Now the question is if you are a DVMT tracking stock shareholder, do you take the $109 USD cash, or, new Class C Dell Technologies stock? Now lets see how Dell Technologies Announces Class V VMware Tracking Stock exchange for stock or cash plays out during the rest of summer and into the fall.

Ok, nuff said, for now.

Cheers Gs

Greg Schulz – Microsoft MVP Cloud and Data Center Management, VMware vExpert 2010-2018. Author of Software Defined Data Infrastructure Essentials (CRC Press), as well as Cloud and Virtual Data Storage Networking (CRC Press), The Green and Virtual Data Center (CRC Press), Resilient Storage Networks (Elsevier) and twitter @storageio. Courteous comments are welcome for consideration. First published on https://storageioblog.com any reproduction in whole, in part, with changes to content, without source attribution under title or without permission is forbidden.

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