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Dell's hokey cokey IPO takes new turn – VMware in, VMware out....

Investor roadshow delayed as Mick D considers alternative plan

Dell Technologies is reportedly pondering whether to hold a bog standard IPO to get the group back onto the stock markets, instead of a previous convoluted plan involving shenanigans with shares in VMware.

The usual loquacious “people familiar with the matter” told newswire Reuters that Dell is considering a regular flotation, having previously rejected this plan in favour of a stock buyback plan for VMware that would have seen Dell’s majority-owned subsidiary effectively buying out its own parent.

That plan focused on tempting VMware investors to sell their shares to Dell in return for Dell Tech holdings.

Dell has reportedly changed its mind on that plan because its recent financial performance exceeded expectations, nearly halving its losses to $461m from $739m over the same period last year.

Dell declined to comment to Reuters, though sources told the newswire that it was preparing to interview banks to underwrite the potential IPO – and had pushed back “a roadshow with tracking [VMware] stock investors” by a week. The same details made their way, separately, into the pages US Wall Street Journal.

Some prominent Dell investors, including activist investor Carl Icahn and Elliott Management, are opposed to Dell’s plans for buying up their VMware stock and swapping it for Dell shares, on the grounds that Dell’s proposed price - $109 per share – undervalues VMware market cap.

Previously Dell has said that going public via the VMware version of doing so would boost profits by two-thirds. ®


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