Dell tracking stock deal paves way for return to stock market

Firm wins support from investors after making changes to original $21bn offer in July

 Michael Dell, founder of the Dell computer company, at the company’s offices in Round Rock, Texas. Photograph: Ben Sklar/The New York Times

Michael Dell, founder of the Dell computer company, at the company’s offices in Round Rock, Texas. Photograph: Ben Sklar/The New York Times

 

Dell Technologies sweetened its bid to buy back a tracking stock it issued in 2016, winning support from investors who were blocking the PC maker’s complex plan to return to the US stock market.

The technology group run by billionaire Michael Dell made the changes after struggling to drum up support for its original $21.7 billion (€19.2 billion) offer in July, under which shareholders of the tracking stock known as DVMT would swap their holding for cash and shares in a newly-relisted Dell.

Disagreements

On Thursday it said it had reached agreement with several big DVMT shareholders to increase the cash portion of the offer from $9 billion (€7.9 billion) to $14 billion (€12.3 billion) and overcome disagreements over how much the stock portion is worth. It put a new headline figure of $23.9 billion (€21.1 billion) on its new offer.

The agreement – the result of weeks of talks with asset managers holding 17 per cent of DVMT, including Dodge & Cox, Elliott Management, Canyon Partners and Mason Capital – sets a headline price of $120 per DVMT share, $11 higher than the previous offer.

That is made up of $70 per share of cash and between 1.5 and 1.8 Dell shares.

– Copyright The Financial Times Limited 2018