by: Elizabeth Balboa, Benzinga Staff Writer
Monday’s a good day for just about any investor with a Dell connection.
The new Class C stock will be publicly listed at an implied value of $109 per share, which represents a 29-percent premium to the stock’s Friday price, and will give the firm a $21.7-billion market cap.
Why It’s Important
The deal will bring Dell back to the public markets after five years as a private entity. Until now, investors have gained exposure to Dell by purchasing shadows of shadows of the company.
VMware is a subsidiary of a subsidiary, and DVMT represented a mere 65-percent stake of a subsidiary’s (EMC’s) 81-percent stake in a subsidiary (VMware).
The decision keeps VMware as an independent company. Dell had been exploring a reverse merger earlier this year.
VMware traded up as much as 8.2 percent and Dell Technologies 12 percent on the news.
The transaction is expected to close in the fourth quarter following approval by a majority of unaffiliated Class V shareholders. Dell will use the dividend proceeds from VMware to facilitate the proposed transaction.
At time of publication, Dell was trading up 7.7 percent at $91.10, and VMware was up 5.4 percent at $155.
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