Dell Confirms Possible IPO or VMware Merger

Mitch Wagner
2/2/2018

Dell on Friday issued an SEC filing confirming earlier reports that it's considering financial restructuring, which could include going back on public markets, a merger with VMware -- in which it owns a majority stake -- or something else entirely.

Or Dell Technologies (Nasdaq: DELL) might make no changes at all to the way it does business, according to the SEC filing.

Not on the table, according to the filing: selling out to a third party, either for Dell or VMware Inc. (NYSE: VMW).

Dell is currently privately held, having taken itself off the public markets in 2013.

Photo by Jjpwiki (Own work) [CC BY-SA 4.0], via Wikimedia Commons
Photo by Jjpwiki (Own work) [CC BY-SA 4.0], via Wikimedia Commons


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The Schedule 13D form filed with the SEC says: "Dell Technologies is evaluating potential business opportunities, including a potential public offering of Dell Technologies common stock or a potential business combination between Dell Technologies and [VMware]. Dell Technologies is also considering maintaining the status quo. The potential business opportunities currently being evaluated by Dell Technologies do not include the sale to a third party of Dell Technologies or [VMware]. The Reporting Persons have not determined which, if any, potential business opportunity to pursue and there can be no assurance that any potential business opportunity will be pursued, the terms thereof, or whether, if pursued, any such business opportunity would be consummated."

VMware issued a statement on Friday. "We are not in a position to speculate about the outcome of Dell's evaluation of potential business opportunities,"CEO Pat Gelsinger said in the statement. "Dell has been a tremendous partner since it became our majority owner and as we've accelerated our growth. We look forward to Dell's continued support as we work to execute our growth plans in the years ahead. The VMware management team remains laser-focused on serving our customers and partners with the best portfolio of software products and services across cloud, mobile, networking and security."

Gelsinger paraphrased: ¯\_(ツ)_/¯

Reports of Dell's strategic rumblings surfaced last week. (See Dell Considering IPO, or Buying All of VMware – Reports.)

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mhhfive
mhhfive
2/2/2018 | 12:29:26 PM
The future is cloudy...
I'm not sure how VMware benefits from a reverse merger (and I'm in good company with those who made its stock price fall), but Dell could definitely benefit from having more cloud software and cloud services in its portfolio. 

It's a bit strange to see the possibility of these mergers being discussed publicly. I suppose Dell is testing the waters to see how their partners and interested parties react. I thought the whole point of Dell going private was to allow it the freedom to pursue avenues that might not be viewed favorably by short-tem investor shareholders. Testing the waters like this.. makes it seem like they're not too confident in their own long-term strategies? 
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