Talk about keeping it in the family: Dell-owned Pivotal shares rocket after Dell-owned VMware mulls gobbling it up

Stock price back up to, er, just below IPO level

Dell-owned VMware is in talks to acquire Dell-owned Pivotal Software, the hypervisor giant announced Wednesday.

In a filing to America's financial watchdog, the SEC, the boards of directors of VMware and Pivotal said they "are proceeding to negotiate definitive agreements with respect to a transaction to acquire all of the outstanding shares of Class A common stock of Pivotal for cash at a per share price equal to $15.00."

The document goes through the financial chicanery of the mulled deal, and includes a note that it's all subject to conditions and discussions and VMware can walk away from it at any time. VMware also wants Dell's outstanding class B shares in Pivotal, other than the ones owned by VMware, exchanged for class-A VMware stock. Pivotal was, interestingly enough, spun out of EMC and EMC-owned VMware in 2012.

The $15 a share is an interesting figure, because that was Pivotal's opening stocking price when it went public in 2018. That figure climbed as high as $29 or so, and then crashed to as low as $8 after it revealed a disastrous second quarter of 2019 – and was sued by its own shareholders for, apparently, losing sales due to its incomplete support for Kubernetes.

Late last month, CEO Rob Mee talked El Reg through his company's efforts to fully embrace Kubernetes, the industry's leading container orchestration technology, in its key products.

On this week's news, Pivotal's share price is up 70 per cent in after-hours trading from $8.30 to $14 apiece, just shy of the IPO starting point. The software upstart's announcement, in which it says it is still in negotiations with its sibling, can be found here.

VMware is due to hold its VMworld conference at the end of this month in San Francisco. ®

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