Dell could go public in VMWare reverse merger, claim sources

January 30, 2018 | 10:58

Tags: #financial #michael-dell #silver-lake

Companies: #dell #microsoft #silver-lake-investment-group #vmware

Dell may be looking to turn back into a publicly-traded company once again in a complex reverse merger with VMWare, the virtual machine specialist of which Dell owns a majority 80 percent share.

Following a profit slump and in-retrospect badly-timed decisions to enter then abandon the smartphone market, Dell was looking for a buyer in 2013 with the Silver Lake Investment Group putting up cash from Microsoft, founder Michael Dell, and others to take the company private for the first time since its initial public offering (IPO) back in 1988. While the deal required renegotiation along the way, continued slumping profits convinced shareholders to part ways with the company and in September 2013 Dell went private once again.

Now, though, rumours are circulating that Dell is once again putting itself up for sale in a bid to return to the days of being a publicly-traded stock, and there's an interesting buyer in the mix: Dell subsidiary VMWare.

According to unnamed sources speaking to CNBC (auto-play video warning), Dell is investigating a reverse merger with virtual machine company VMWare - of which Dell actually owns a majority 80 percent share, acquired in 2015 as part of a deal to buy enterprise computing giant EMC. The deal, if it went ahead, is believed to be focused on paying down Dell's billions of dollars in debt as well as providing those who participated in the 2013 purchase with a return on their investment.

CNBC's analysis of the rumour pegs any possible reverse merger as being 'the largest technology deal ever', but thus far both Dell and VMWare have refused to issue comment on the site's claims. That hasn't stopped the market reacting, however: VMWare's share price sank 16.46 percent following the report.

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