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Michael Dell thinks he knows what his namesake company is worth, and he isn’t budging.

Dell’s management team spent much of the past month in initial meetings trying to win support from more than four dozen holders of a tracking stock as part of a plan to take Dell Technologies Inc. public, according to people familiar with the matter. While skepticism is mounting as to how Dell arrived at the offer price of $109-a-share in cash and Dell Class C stock that will be traded for the tracking stock, the company has no intention of sweetening the bid, the people said.

The cash and share-swap package, announced on July 2, will see Dell return to the public markets by buying out its tracking stock in a deal valued at $21.7 billion.

For some top holders of the tracking stock, known as DVMT, the share component is a sticking point, said the people, who asked not to be identified because the matter isn’t public. The offer values Dell’s Class C shares at $79.77, leaving investors wondering how those shares jumped 140 percent between May — when their private value was listed at $33.17 apiece in a proxy filing — and July 2 when the deal was announced.

Some aren’t convinced the company’s performance warrants the increase in value, the people said. Many major DVMT holders, including activist investors Carl Icahn and Elliott Management Corp., are waiting for more information before deciding whether to take the deal, they said.

With the onus on Dell to justify its valuation of the Class C shares, investors are looking to the next proxy filing for additional clarity. That filing is expected to be made public near the beginning of August, the people said.

Valuation Gap
At stake is Michael Dell’s goal of streamlining his debt-laden technology empire, while giving the company the ability to use equity to finance future acquisitions. Dell’s management is confident that the information in the proxy statement and subsequent roadshow meetings will convince investors of the valuation, according to people familiar with the matter.

“The gap between Dell and the Street therefore comes down to a difference in view about how valuable core Dell is,” Deutsche Bank AG analyst Karl Keirstead wrote in a note to investors. Keirstead sees two ways for Dell to bridge the gap: Increase the bid by raising the equity portion of the deal, which the people familiar said it won’t do, or make Wall Street more comfortable with Dell’s underlying fundamentals and profitability.

Investors holding about 13 percent of Dell’s tracking stock as of the May filing period told Bloomberg they were concerned about the deal. All of them said they had spoken to other shareholders who felt the same.

A Dell representative declined to comment on the meetings. Representatives for Icahn and Elliott declined to comment.

Dell, the company’s billionaire founder, is no stranger to investor push back. As he sought support in 2013 for his $25 billion bid to take the company private, Icahn led and then abandoned a proxy fight to install a new board that would have replaced him. Then, as now, Dell argued that others are undervaluing the company’s shares.

In the current negotiations, Dell is leaving the investor pitches to Dell Chief Financial Officer Tom Sweet and Vice Chairman Jeff Clarke, as well as the company’s treasurer, head of investor relations and bankers. Some investors have grown frustrated with his hands-off approach, the people said.

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Complex Structure
The structure of the DVMT deal is unusual and adds a layer of complexity to valuing the company. Tracking stocks had become a rare asset since thriving amid the dot-com bubble as a way for traditional companies to give investors access to high-growth internet businesses.

Dell issued the DVMT shares in 2016 to help pay for its $67 billion takeover of EMC Corp., which included EMC’s stake in software maker VMware Inc. The DVMT stock was also intended to give shareholders a chance to benefit from VMware’s performance. A majority of the holders, excluding affiliates of Dell, must agree to the share swap for the deal to go ahead, Dell said in a July 2 statement.

While DVMT has more than doubled to about $93 a share in the past two years, it lags VMware, which trades at around $145 a share. DVMT’s current price — about $16 below the offer price — is also a sign of skepticism that the deal can get done.

IPO Option
In meetings, Dell has made it clear that company could still pursue a traditional initial public offering, the people said. That would trigger a straight conversion of DVMT shares to Dell shares, without the guarantee of the additional cash component of the current proposal, they said. This option was initially laid out in Dell’s incorporation documents.

Still, an IPO isn’t the preferred option within the Dell camp, the people said. The company would have to make its pitch to Wall Street at large, leaving the valuation at the mercy of public market investors willing to pay for the shares.

If Michael Dell gets his way, the new structure of his company will help sidestep such public fights.

His stake in the newly public entity will be 47 percent to 54 percent fully diluted, the company said. He’ll also have considerable voting rights, along with his private equity partner, Silver Lake, which has a 24 percent stake in Dell and plans to retain its investment.

DVMT stockholders, meanwhile, are expected to own only about 21 percent to 31 percent of Dell if the deal goes through, according to a July filing.