Those bonds could later be exchanged for equity in the combined company.
Dell is asking the banks to make a series of bridge loans that would then be converted into high-yield bonds. The $27.25 bid is also somewhat higher than the average price paid by Elliott Management, the activist hedge fund that has been pressuring EMC’s board to sell off assets and shake up its management. Together that would bring the per-share value above $30, according to sources. That stock would “track” the value of the remaining 20 percent of VMware that openly trades.
EMC STOCK CONVERTED TO DELL STOCK SYMBOL SOFTWARE
In addition to the cash offer of $27.25 a share, Dell would give investors what’s known as a tracking stock in VMware, the cloud software company that’s 80 percent owned by EMC. Morgan CEO Jamie Dimon, sources briefed on the process of the deal tell Re/code. Morgan, Bank of America and Credit Suisse, as well as Silver Lake, the private equity firm that owns part of the company.ĬEO Michael Dell was in New York today meeting with bank executives, including J.P. Dell, led by CEO Michael Dell, has been negotiating with a consortium of banks to raise financing, including J.P. The offer represents a $50 billion-plus takeover attempt by Dell, which would stand as the largest tech deal of all time. CNBC’s David Faber earlier reported the value of the transaction would be “worth at least $30 a share,” without citing a precise cash figure. Shareholders would also get a specialized stock in cloud software company VMware as part of the deal. Dell is offering $27.25 a share in cash to buy out EMC, according to sources briefed on the negotiations.
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