Dell Boosts Final Offer for Tracking Stock to $120 a Share

Dell Boosts Final Offer for Tracking Stock to $120 a Share
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Dell boosted an offer to shareholders of its tracking stock, DVMT, to win support for the company’s plan to return to public markets, according to Bloomberg.

Dell said its final offer is for $120 per share in a combination of cash and stock, and the maximum amount of cash to be paid out will rise to $14 billion, from $9 billion according to a statement from the company. Dell also offered holders of the stock the option of receiving 1.5 to 1.8 shares, depending on how much cash DVMT holders elect to receive and how the stock trades in the the 17 days around the Dec. 11 vote on the matter.

The offer implies a total market capitalization of $23.9 billion for DVMT, an additional $2.2 billion in implied value over the previous proposal. DVMT holders will end up owning between 17 percent and 33 percent of Dell, depending on the final terms. The revised deal comes after some investors balked at Dell’s initial June offer to holders of DVMT, which valued their holdings at $109 a share in cash and Dell stock. Dell reached out to investors earlier this month to determine what it would take to win their support for a return to public markets.

After the revised offer, Dell said an “overwhelming number“ of shareholders that it contacted supported the transaction. About 17 percent of DVMT shareholders have agreed to support the transaction, including funds affiliated with Dodge & Cox, Elliott Management, Canyon Partners and Mason Capital Management, according to Dell. The company expects the deal to close by the end of 2018. After the announcement, VMware disclosed in an SEC filing that it has waived certain provisions of its governance agreement with Dell, including with regard to a VMware special dividend declaration.