This morning, Dell confirmed previously published reports in an SEC filing, that it is considering various options to possibly reorganize itself. Reports emerged last week suggesting the Dell board was planning a meeting to discuss options for dealing with the enormous debt it took on when it acquired EMC in 2015 for $67 billion.
The SEC filing confirmed earlier reports that it was considering three options. The first is a Dell public stock offering, essentially an IPO, although it would be the second time Dell went public. Michael Dell took the company private in a $24 billion deal in 2013. The company had originally gone public back in 1988.
Other options include “a business combination with VMware” or doing nothing. The latter seems unlikely since changes to the tax law mean a growing interest bill on the company’s $46 billion outstanding debt.
The filing goes onto say that the company would have preferred to keep this quiet, but because of leaks and its fiduciary responsibility as the owner of an 82 percent stake in VMware, it had little choice but to issue this paperwork with the SEC.
“We would normally keep our deliberations confidential until a particular course of action is determined, but because Dell Technologies owns ~82% of VMware, we are required to make a public filing with the U.S. Securities and Exchange Commission,” the company stated in the filing.
VMware felt compelled to issue a press release on the matter after the SEC document was made public, which appears to be an attempt to reassure customers and stockholders while the companies decide what to do.
While Dell owns the majority stake in VMWare from its deal with EMC, the company still operates independently with its own CEO and board of directors. It is also traded publicly as a separate stock holding.
Both the filing and the VMware release made it clear that nothing had been decided yet and all options were being considered. What’s different now is that what was rumor last week has been confirmed with this filing.
The full SEC document is embedded below:
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