Dell Technologies to offer a new class of publicly listed common stock following completion of proposed exchange of Dell Technologies Class V tracking stock for Dell Technologies Class C common stock
The Class V stockholders will have the option to elect $109 in cash consideration per Class V share, up to $9 billion in aggregate, which represents a 29% premium to the Class V closing share price immediately prior to announcement
$109 in value per share implies a total market capitalization of $21.7 billion for the Class V stockholders
VMware's board of directors, on the recommendation of a special committee of its directors, has voted to declare an $11 billion cash dividend pro rata to all VMware stockholders contingent on satisfaction of the other conditions to the completion of the transaction. Dell Technologies' share of such dividend will be approximately $9 billion. Pro forma for the transaction, DVMT stockholders will own 20.8%-31.0% of Dell Technologies, depending on cash election amounts
The Special Committee of Dell Independent Directors recommends the transaction following extensive independent review; the transaction is subject to stockholder approval by holders of the Class V shares
Transaction simplifies capital structure and positions Dell Technologies to build on its growing strategic and financial strength
VMware maintains its independence as a separate publicly traded company while Dell Technologies will continue to own 81% of VMware common stock
