The efforts to take Dell public without an IPO had suffered a setback when investors led by Carl Icahn objected to the idea
The shareholder approval allows the tech giant to buy the tracking shares, which act as a proxy for Dell’s stake in its fully-owned subsidiary VMWare, in a cash plus equity deal under a unique listing procedure. The total value of the outstanding stock is estimated at $24 billion. After listing, most probably on December 28, Dell’s class-C stock is expected to trade at $48 per share – as per the current valuation of the tracking stock.
It is expected that Michael Dell and his partner Silver Lake will own up to 81% stake in the company. The new stock will be issued to holders of the tracking shares based on the value determined during the pricing period.
The advantages of being a listed entity will allow the management to pursue its growth strategy more effectively, which has already transformed Dell into the biggest privately held technology company in just a few years. Though Dell’s strong financial performance continues to enhance cash flow, its high debt continues to be an area that needs attention.