Two weeks before Chrimbo? When Dell V-Class shareholders get to vote on THAT deal

Vote to sell DVMT or swap the stock for a newly public Dell set for 11 December


A fortnight before Christmas, investors in Dell Technologies tracking stock will finally get the opportunity to vote on whether to cash them in or swap them for a piece of the company when it goes public again.

The date for the vote is set for 0800 Central US Time on 11 December (1400 UTC), though Dell Technologies has plenty of additional Ts to cross and Is to dot before it can list on an Exchange.

Dell today started to mail the proxy statement/ prospectus to Dell Tech shareholders; there are two options in the table.

Under the first, Dell will pay $109 per share to owners of V-Class Common Stock, also known by the ticker DVMT. The offer is a 29 per cent premium to the share price immediately prior to the announcement of the transaction.

The V-Class shares were created in 2016 when Dell needed some assistance to find the last $10bn in funding to purchase EMC for $67bn. This stock tracks Dell’s economic interest in VMware - considered to be the jewel in the group’s crown.

The second option is for V-Class shareholders to swap the stock for 1.3365 shares of the newly public Dell. This would also involve Dell distributing a $9bn dividend to sweeten things further.

Both the Special Committee of Dell Technologies’ board of directors acting on behalf of Class V shareholders and Dell Technologies board of directors urge shareholders to agree the plan and vote “FOR” it.

Not everyone is in favour of the two options on the table, and (depending on your world view) corporate raider, activist investor or general stock market botherer Carl Icahn is among them. He has disputed the value of the transaction to DVMT shareholders and said he plans to do all he can to stop it, claiming the major beneficiaries will be Michael Dell and backer Silver Lake.

“In my opinion it is better to have peace than war, but be assured, I still enjoy a good fight for the right reasons, and in the current situation, I do not see peace arriving quickly,” Icahn wrote last week in a letter to fellow shareholders that urged them to vote against a sale.

Icahn owns 16.5 million DVMT shares, equating to 8.3 per cent of the base.

Other private institutional investors agreed, including P Shoenfeld Asset Management, which has $150m worth of DVMT stock; while BlackRock and Elliott Management are also reportedly against the transaction.

Talk of Dell going public again began in January when loquacious sources started to tell journalists that Dell was considering breaking out some moves, including a reverse merger with VMware. That deal was shot down by shareholders.

In fact Icahn accused Dell of making this deal public knowing it would negatively impact the share prices of both DVMT and VMware, as happened. ®

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