DVMT Dell Technologies Inc. Class V (delisted)

By Micah Maidenberg 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 16, 2018).

Dell Technologies Inc. has raised its offer to buy out holders of stock tracking its interest in VMware Inc. after coming under pressure from large investors to sweeten the bid.

The PC maker and data-storage company said Thursday its new offer for shareholders in the affiliate, DVMT -- which tracks the value of Dell's stake in software maker VMware -- implies a value of about $24 billion.

The offer includes up to $14 billion in cash, with the remainder coming in a swap for new shares. The purchase of the tracking stock would help return Dell to public markets after it was taken private in 2013.

Dell's prior offer implied a value of almost $22 billion, including $9 billion in cash. Putting more cash on the table will increase the certainty of value for shareholders in DVMT, Dell said in a statement.

Dell on Thursday also agreed to allow shareholders of the future publicly traded Dell to elect an independent member to the company's board.

In 2015, Dell set up the tracking stock to help it finance its takeover of data-storage company EMC Corp., which at that time owned the majority of VMware. Tracking stocks allow companies to expose specific business units to public markets, potentially increasing their visibility and value.

Dell, which is based in Round Rock, Texas, said it expects the current owners of DVMT to own between 17% to 33% of the new publicly traded Dell, depending on cash and stock elections.

The Wall Street Journal reported Wednesday that Dell planned to increase its offer.

Some large investors were considering voting against the company's initial DVMT offer at a special vote scheduled for Dec. 11.

Dell said the new proposal has support from key owners of the tracking stock, including Dodge & Cox, Elliott Management, Canyon Partners and Mason Capital Management. Together, those shareholders own 17% of DVMT.

BlackRock Inc., which owns more than 4% of DVMT, is also supportive, according to people familiar with the matter.

Activist investor Carl Icahn, who owns a 9.3% stake in DVMT, claimed Dell enhanced its offer largely due to his company's opposition to the initial proposed deal. "We believe we have greatly enhanced value for all DVMT stockholders," he said. A spokesman for Dell declined to comment.

DVMT fell 0.6% to $105.06 in Thursday trading.

Cara Lombardo contributed to this article.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

November 16, 2018 02:47 ET (07:47 GMT)

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