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Reorg Research Quotes Jason Saltsberg on Dell’s Possible Forced IPO

October 26, 2018

Corporate Partner Jason Saltsberg was quoted in the October 22, 2018, Reorg Research (subscription required) article on the dispute between computer technology company Dell and holders of the company’s DVMT tracking stock over Dell’s second bid to go public after going private in 2013. In 2015, Dell acquired data storage/management developer EMC Corp., which itself owned approximately 82% of software company VMWare Inc. To compensate EMC’s stakeholders in VMWare post-acquisition, Dell reimbursed EMC’s VMWare shareholders with a tracking stock (DVMT) representing 65% of VMWare. Now, with a December 11th vote on Dell’s buyback offer approaching, the DVMT stock would be converted into common shares of Dell, a move that holders of the stock claim would drastically undervalue it. Should Dell pursue the IPO and force the DVM shareholders to convert, which it can attempt by invoking a provision in the Dell-EMC merger’s final prospectus, legal action by the shareholders may be imminent. Mr. Saltsberg comments, “[I]n making the decision to convert, Dell will likely want to obtain a fairness opinion and have the process be led by an independent committee to ensure Dell is shielded from a potential lawsuit.”


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