Dell is exploring an initial public offering after shelving this option earlier this year in favor of going public by buying back a special type of stock from investors.
Dell's IPO deliberations come as several hedge funds, including Elliott Management and Canyon Capital Advisors, as well as activist investor Carl Icahn, resist a $21.7 billion (Dh79.6bn) cash-and-stock offer from Dell to buy back "tracking stock" from them tied to Dell's 81 per cent stake in software company VMware.
Such a security "tracks", or depends, on the financial performance of a specific business unit or operating division of a company, rather than the operations of the issuer as a whole.
The acquisition of this publicly traded tracking stock would result in Dell going public without an IPO. However, the hedge funds have said that Dell's offer shortchanges them because it inflates its own value and discounts the value of the tracking stock.
Dell had considered an IPO earlier this year as part of a strategic review that also explored a possibility of a reverse merger with VMware. In July, it decided against the IPO because of concerns that its large debt pile would put off stock market investors, sources said at the time.
The tracking stock deal would not require Dell to raise new money because it would be funded by the company issuing new shares and with a $9bn dividend it would receive from VMware.
Dell's recent financial performance has emboldened the Round Rock, Texas-based computer company to once again consider the IPO seriously, according to the sources, who spoke on condition of anonymity because the deliberations are confidential.
Dell is preparing to interview investment banks this week for underwriting roles in a potential IPO, the sources said. It has also pushed back a roadshow with tracking stock investors that was slated for this week to the following week, the sources added.
Dell declined to comment. Dell's IPO preparations were first reported earlier on Sunday by the Wall Street Journal.
There is no certainty that Dell will go ahead with an IPO. Dell chief financial officer Tom Sweet said last week the company would go back to its "status quo" if investors rejected its offer for the tracking stock.
Dell said this month that its operational cash flow soared by 45 per cent year-on-year in the latest quarter to $2.6bn, while its total debt dropped to $50.3bn, down from the $57.3bn debt pile in September 2016, when it completed its acquisition of data storage company EMC.
Dell issued the tracking stock in 2016 to buy EMC for $67bn because it could not pay for the whole deal in cash and did not want to add to its debt burden. EMC owned the majority stake in VMware, which Dell inherited.
Dell has offered to exchange each tracking share for 1.3665 shares of its Class C common stock, as well as cash, valuing the tracking stock at $109. Dell's equity would be valued at between $61.1bn and $70.1bn, more than twice the value of the $24.9bn deal that founder and chief executive Michael Dell and buyout firm Silver Lake clinched to take the company private in 2013.
But as with that take-private deal, which went through after Michael Dell slightly changed its terms, hedge funds are opposing the tracking stock offer. The tracking stock ended trading on Friday at $96.20, substantially below Dell's $109 per share offer, indicating investor skepticism over its success.
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After a potential IPO, Dell could force owners of tracking stock to sell it. The premium would be between 20 and 10 per cent, depending on the amount of time between Dell forcing them to sell it and the completion of the IPO, according to regulatory filings.
Whether tracking stock shareholders would be better off under that scenario, as opposed to selling to Dell now, would hinge on the performance of the IPO and the timing of a subsequent takeout.
Going public would give Michael Dell and Silver Lake the option to eventually sell down their stakes, even though they have said they have no plans to do so. If the tracking stock deal goes through, Michael Dell would own 47 per cent to 54 per cent of the combined company, while Silver Lake would own between 16 per cent and 18 per cent.
Michael Dell has turned to deal-making to transform his company from a PC manufacturer into a broader seller of information technology services to businesses, ranging from storage and servers to networking and cyber security.
The strategy is in sharp contrast to that of rival HP, which separated in 2016 from Hewlett Packard Enterprise, based on the reasoning that two technology companies focused separately on hardware and services would be more nimble.
The specs
Engine: 6.2-litre V8
Transmission: seven-speed auto
Power: 420 bhp
Torque: 624Nm
Price: from Dh293,200
On sale: now
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E77kWh%202%20motors%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E178bhp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E410Nm%0D%3Cbr%3E%3Cstrong%3ERange%3A%20%3C%2Fstrong%3E402km%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EDh%2C150%2C000%20(estimate)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ETBC%3C%2Fp%3E%0A
The specs
Price, base / as tested Dh135,000
Engine 1.6L turbo
Gearbox Six speed automatic with manual and sports mode
Power 165hp @ 6,000rpm
Torque 240Nm @ 1,400rpm 0-100kph: 9.2 seconds
Top speed 420 kph (governed)
Fuel economy, combined 35.2L / 100km (est)
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Credit Score explained
What is a credit score?
In the UAE your credit score is a number generated by the Al Etihad Credit Bureau (AECB), which represents your credit worthiness – in other words, your risk of defaulting on any debt repayments. In this country, the number is between 300 and 900. A low score indicates a higher risk of default, while a high score indicates you are a lower risk.
Why is it important?
Financial institutions will use it to decide whether or not you are a credit risk. Those with better scores may also receive preferential interest rates or terms on products such as loans, credit cards and mortgages.
How is it calculated?
The AECB collects information on your payment behaviour from banks as well as utilitiy and telecoms providers.
How can I improve my score?
By paying your bills on time and not missing any repayments, particularly your loan, credit card and mortgage payments. It is also wise to limit the number of credit card and loan applications you make and to reduce your outstanding balances.
How do I know if my score is low or high?
By checking it. Visit one of AECB’s Customer Happiness Centres with an original and valid Emirates ID, passport copy and valid email address. Liv. customers can also access the score directly from the banking app.
How much does it cost?
A credit report costs Dh100 while a report with the score included costs Dh150. Those only wanting the credit score pay Dh60. VAT is payable on top.
THE LOWDOWN
Photograph
Rating: 4/5
Produced by: Poetic License Motion Pictures; RSVP Movies
Director: Ritesh Batra
Cast: Nawazuddin Siddiqui, Sanya Malhotra, Farrukh Jaffar, Deepak Chauhan, Vijay Raaz
The five pillars of Islam
Uefa Champions League last 16 draw
Juventus v Tottenham Hotspur
Basel v Manchester City
Sevilla v Manchester United
Porto v Liverpool
Real Madrid v Paris Saint-Germain
Shakhtar Donetsk v Roma
Chelsea v Barcelona
Bayern Munich v Besiktas
RESULTS
%3Cp%3E5pm%3A%20Wathba%20Stallions%20Cup%20%E2%80%93%20Handicap%20(PA)%20Dh70%2C000%20(Turf)%202%2C200m%3Cbr%3EWinner%3A%20RB%20Sarab%2C%20Allaia%20Tiar%20(jockey)%2C%20Khalifa%20Al%20Neyadi%20(trainer)%3C%2Fp%3E%0A%3Cp%3E5.30pm%3A%20Mamsha%20Alkhair%20%E2%80%93%20Handicap%20(PA)%20Dh80%2C000%20(T)%201%2C600m%3Cbr%3EWinner%3A%20Mutaqadim%2C%20Ray%20Dawson%2C%20Ibrahim%20Al%20Hadhrami%3C%2Fp%3E%0A%3Cp%3E6pm%3A%20Emirates%20Fillies%20Classic%20%E2%80%93%20Prestige%20(PA)%20Dh100%2C000%20(T)%201%2C600m%3Cbr%3EWinner%3A%20Almotajalliah%2C%20Ray%20Dawson%2C%20Ibrahim%20Al%20Hadhrami%3C%2Fp%3E%0A%3Cp%3E6.30pm%3A%20Emirates%20Colts%20Classic%20%E2%80%93%20Prestige%20(PA)%20Dh100%2C000%20(T)%201%2C600m%3Cbr%3EWinner%3A%20Fadwaan%2C%20Antonio%20Fresu%2C%20Ahmed%20Al%20Mehairbi%3C%2Fp%3E%0A%3Cp%3E7pm%3A%20The%20President%E2%80%99s%20Cup%20%E2%80%93%20Group%201%20(PA)%20Dh2%2C500%2C000%20(T)%202%2C200m%3Cbr%3EWinner%3A%20Mujeeb%2C%20Richard%20Mullen%2C%20Salem%20Al%20Ketbi%3C%2Fp%3E%0A%3Cp%3E7.30pm%3A%20The%20President%E2%80%99s%20Cup%20%E2%80%93%20Listed%20(TB)%20Dh380%2C000%20(T)%201%2C400m%3Cbr%3EWinner%3A%20Western%20Writer%2C%20Richard%20Mullen%2C%20Bhupat%20Seemar%3C%2Fp%3E%0A
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Profile
Company name: Jaib
Started: January 2018
Co-founders: Fouad Jeryes and Sinan Taifour
Based: Jordan
Sector: FinTech
Total transactions: over $800,000 since January, 2018
Investors in Jaib's mother company Alpha Apps: Aramex and 500 Startups
Super Saturday results
4pm: Mahab Al Shimaal Group 3 | US$350,000 | (Dirt) | 1,200m
Winner: Drafted, Pat Dobbs (jockey), Doug Watson (trainer).
4.35pm: Al Bastakiya Listed | $300,000 | (D) | 1,900m
Winner: Divine Image, Brett Doyle, Charlie Appleby.
5.10pm: Nad Al Sheba Turf Group 3 | $350,000 | (Turf) | 1,200m
Winner: Blue Point, William Buick, Charlie Appleby.
5.45pm: Burj Nahaar Group 3 | $350,000 | (D) | 1,600m
Winner: Muntazah, Jim Crowley, Doug Watson.
6.20pm: Dubai City of Gold Group 2 | $300,000 | (T) | 2,410m
Winner: Old Persian, William Buick, Charlie Appleby.
6.55pm: Al Maktoum Challenge Round 3 Group 1 | $600,000 | (D) | 2,000m
Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer.
7.30pm: Jebel Hatta Group 1 | $400,000 | (T) | 1,800m
Winner: Dream Castle, Christophe Soumillon, Saeed bin Suroor.
Key developments in maritime dispute
2000: Israel withdraws from Lebanon after nearly 30 years without an officially demarcated border. The UN establishes the Blue Line to act as the frontier.
2007: Lebanon and Cyprus define their respective exclusive economic zones to facilitate oil and gas exploration. Israel uses this to define its EEZ with Cyprus
2011: Lebanon disputes Israeli-proposed line and submits documents to UN showing different EEZ. Cyprus offers to mediate without much progress.
2018: Lebanon signs first offshore oil and gas licencing deal with consortium of France’s Total, Italy’s Eni and Russia’s Novatek.
2018-2019: US seeks to mediate between Israel and Lebanon to prevent clashes over oil and gas resources.
BANGLADESH SQUAD
Mashrafe Mortaza (captain), Tamim Iqbal, Liton Das, Soumya Sarkar, Mushfiqur Rahim (wicketkeeper), Mahmudullah, Shakib Al Hasan (vice captain), Mohammad Mithun, Sabbir Rahaman, Mosaddek Hossain, Mohammad Saifuddin, Mehidy Hasan Miraz, Rubel Hossain, Mustafizur Rahman, Abu Jayed (Reporting by Rohith Nair in Bengaluru Editing by Amlan Chakraborty)
Killing of Qassem Suleimani
What went into the film
25 visual effects (VFX) studios
2,150 VFX shots in a film with 2,500 shots
1,000 VFX artists
3,000 technicians
10 Concept artists, 25 3D designers
New sound technology, named 4D SRL
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Brief scores
Day 1
Toss England, chose to bat
England, 1st innings 357-5 (87 overs): Root 184 not out, Moeen 61 not out, Stokes 56; Philander 3-46
AUSTRALIA SQUAD
Tim Paine (captain), Sean Abbott, Pat Cummins, Cameron Green, Marcus Harris, Josh Hazlewood, Travis Head, Moises Henriques, Marnus Labuschagne, Nathan Lyon, Michael Neser, James Pattinson, Will Pucovski, Steve Smith, Mitchell Starc, Mitchell Swepson, Matthew Wade, David Warner
The First Monday in May
Director: Andrew Rossi
Starring: Anna Wintour, Karl Lagerfeld, John Paul Gaultier, Rihanna
Three stars
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
UAE currency: the story behind the money in your pockets
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
