Dell Technologies will ask shareholders to vote in calendar Q4 on the proposed changes in its relationship with VMware.
The company wants to re-list on an Exchange, and has toyed with all sorts of mechanisms to do so, including a reverse merger with Virtzilla that proved unpopular with investors.
Under the current plan, Dell will buy the DMVT tracker stock that it created in 2016 to help fund the buy of EMC. The DVMT stock tracks Dell's economic interest in VMware. Dell acquied 80 per cent of VMware as part of the EMC purcahse.
Some shareholders, including corporate raider Carl Icahn who owns 16.5m shares in DVMT - 8.3 per cent of the issued stock - are opposed to the transaction and jostling for better terms.
Icahn yesterday wrote to fellow shareholders urging them to challenge Michael Dell’s plan to swap each DVMT share for 1.3665 shares of the newly public Dell, or accept $109 for the DVMT stock. He claimed this offer short changes investors and threatened to “fight” to stop it.
In a statement sent to The Register, Dell Technologies said it “continues to believe that the proposed offer for DVMT shares which represents a 29 per cent premium to the DVMT share price immediately prior to the announcement of the transaction is fair and in the best interests of DVMT shareholders.”
The offer on the table would also distribute a $9bn dividend in a “aggregate cash consideration”.
Dell said the intended buy of DVMT stock was the “result of a very transparent and thorough process of evaluating multiple alternatives”. Should this deal not happen, Dell may shelve its ambitions to again become a publicly listed entity.
In his letter, Icahn accused Dell of making the VMware reverse merger plan public in January, knowing that shareholders and the market would be concerned and that the value of stock for DVMT and VMware would slide - both did by more than 25 per cent before recovering.
Dell issued DVMT tracker stock because its bankers could not find $10bn in cash to put towards the $60bn plus buyout of EMC. EMC itself bought VMware at the start of 2004 and sold 15 per cent of Vmware to the public in August that year.
DVMT is not supposed to be sold at more than a 10 per cent discount on the price of VMware shares.
Dell added today it has spoken to shareholders that account for 40 per cent of the entire issued DVMT base. And it said an independent Special Committee representing DVMT investors and backed by financial and legal advisors “determined consistent with its legal obligations that this transaction was the best available option for DVMT shareholders.
With this in mind, the company continued:
Dell expects to file definitive proxy materials in the coming weeks and set a date for a shareholder vote, and unaffiliated shareholders will have the opportunity to vote on the transaction in the fourth quarter of this calendar year.
In order to protect the interests of the DVMT shareholders, the transaction remains subject to a shareholder vote and requires support from a majority of the unaffiliated DVMT shareholders.