Deal to return Dell to public negotiation, but still in the hands of its founder

When Michael S. Dell privatized his technology company of the same name in 2013, he said it would give him the freedom to prepare for a future that would extend far beyond personal computers [19659002]. One-stop technology for business, he and his financial partner, the investment company Silver Lake, plan to bring the company back to public markets – albeit in a complicated way that holds them firmly under control.

Dell and Silver Lake are expected to announce as early as Monday that they have reached a $ 21.7 billion deal to redeem investors in a special class of shares created in 2016 to help Dell buy the company EMC network. This track effectively tracks the performance of Dell's 82% stake in VMware, the fast-growing network software company that Dell inherited during EMC's purchase. (The remaining 18% of VMware is traded in a different market.)

The agreement, approved by the Dell and VMware boards of directors on Sunday night, would simplify Dell's stock structure and its listed subsidiary. But that would also mark Dell's return to public markets, with a twist: the special shares held by Dell and Silver Lake would give them more votes than other investors.

The transaction represents in some ways the culmination of a $ 100 billion bet by Dell and Silver Lake that, far from the harshness of government procurement, could reorganize a reputable computer manufacturing company. personal and traditional servers in the era of smartphones and cloud computing. Not only does Dell still provide the machines that are on the desktops inside many office buildings, but it has also found a market ready to sell equipment and software to the types of computer services in network that was thought to be ending

. "We have completely transformed our company and we have become a key leader in huge segments of the industry," Dell said in a telephone interview

an expensive gamble with Dell and Silver Lake spending about $ 25. billion to privatize Dell, then $ 67 billion to buy EMC – a transaction that has created a kind of one-stop shop for the hardware and software companies need to run their businesses.

"This was the largest and most complex" Egon Durban, the managing partner of Silver Lake who worked closely with Mr. Dell, said in an interview

but this bet has in many ways.

Dell has increased its share of the PC and server market, and research firm IDC has estimated that Dell's global server business has jumped more than 50 % in the first quarter, taking first place from longtime leader Hewlett Packard, who sells more equipment to cloud service providers. "According to estimates from the Gartner research firm, Dell is also ranked first among PC shipments in the US in the first quarter.

"In 2012, people said the PC was dead, it was not," Dell said. "Three years ago, people were saying that everything was going in the public cloud.It turns out that it was completely wrong too."

And Mr. Dell pushed the company into new areas, like Internet-connected devices and artificial intelligence.

Much of the transformation work is complete. Under the terms of the agreement, Dell will offer either $ 109 in cash shares or 1,3665 Class C shares newly issued per se for each tracking stock known by its ticker, DVMT. The cash portion of the transaction will come from a special $ 11 billion dividend that VMware will issue to all of its shareholders – of which $ 9 billion will go to Dell.

The transaction would help simplify what has been a complicated stock structure. If the transaction is approved by shareholders of the DVMT stock, there will be only two types of publicly traded shares related to Dell: the Dell class C shares and the common shares of VMware.

Some shareholders of DVMT – including Carl C Icahn, the billionaire who bitterly fought Mr. Dell's deal in 2013 to take his private company – can fight for more money. But Dell and Durban said DVMT shares, while trading well below VMware's publicly traded shares, have more than doubled over the course of their existence.