Dell votes to buy back VMware tracking stock and go public again

Dell announced it has agreed to buy back the VMware tracking stock from the EMC acquisition. The company confirmed the buy-back price of $120 per share for a total of $23.9 billion. With today’s move, Dell will return to being publicly traded starting on December 28th.

Sixty-one percent of shareholders voted in favor of the deal. It’s unclear how Wall Street will deal with the $50 billion debt load the company is carrying as a result of that $67 billion EMC acquisition from two years ago, but chairman and CEO Michael Dell got the results he wanted.

“With this vote, we are simplifying Dell Technologies’ capital structure and aligning the interests of our investors,” Dell said in a statement.

A company spokesperson confirmed that Dell is going public again. “Portions of Dell Technologies have been publicly traded through, for example, VMware and the tracker stock. The NYSE:DELL Class C shares will enable investors to invest in the full breadth of Dell Technologies company.” In plain terms, that means the company will be sold on the New York Stock Exchange under the DELL symbol.

Part of the EMC deal was a payout to shareholders based on VMware tracking stock. VMware was a key part of the deal in that it was one of the more valuable pieces in the EMC federation of companies. It still runs as a separate company with separate stock listing.

There was much drama prior to this vote with activist investor Carl Icahn suing the company last month after Dell announced a price of $21.7 billion for the tracking stock last July. The move did get Dell to move the needle on the price a bit, although not as much as Icahn had hoped.

With today’s vote, Ray Wang, founder and principal analyst at Constellation Research, says the company is looking to move away from activist investors like Icahn and Elliott Management to more traditional institutional investors. “Michael Dell is attempting to rid his short-term activist shareholders for more mid- to long-term institutional types as he goes public again,” Wang explained.

As the company returns to the public markets, it means it is in the fairly unique position of going from public to private to public again. Dell originally went public in 1988 before taking the company private again in 2013 in a $24.4 billion buy-back.

At least one other company, Deltek, took a similar path over a decade ago. It eventually was sold to private equity firm Thoma Bravo for $1.1 billion in 2012 before being sold again in 2016 for $2.8 billion.

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