Dell Technologies: Dell Technologies to Acquire VMWare Tracking Stock

Dell Inc. said Monday that it will repurchase stockholders who track the performance of VMWare Inc. using a mix of cash and equity in Dell.

This decision marks the culmination of a strategic review that Dell has been running for several months in an effort to consolidate its complicated ownership structure without overburdening its balance sheet, which carries a debt of about $ 50 billion. .

Dell announced that it would propose to exchange each VMware Tracking Action for 1.3665 Dell Technologies Clbad C common shares or, at the option of the holder, $ 109 in cash, subject to the total amount of the counterparties. in cash not exceeding $ 9 billion.

The transaction represents a 28.9% premium on Dell's closing price on Friday.

Dell shares rose 10.7% to $ 93.6 million before trading, while VMWare shares rose 12.3% to $ 165.

The cash component of the offering will be funded by a unique special dividend of $ 11 billion that VMWare will pay pro rata to its shareholders, VMWare said.

After the agreement, VMware shareholders would hold between 20.8% and 31% of Dell, depending on the number of investors opting for money, Dell said.