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Dell rules out sale, but still considers reverse spin-off with VMware

A special committee is analysing the possible options for the tech giant

Dell sign on top of building

Dell provided an update on its quest to regain its status as a public company late last week, revealing it won't sell itself or VMware to a third party, but is still considering whether to float on the New York Stock Exchange or merge with VMware.

In a filing made to the US Securities and Exchange Commission (SEC), the company explained it may merge with VMware in what has been dubbed a reverse spin-off, as it owns 80% of its stock through subsidiary Dell EMC, or perform a traditional IPO, depending on the recommendation of a "special committee" it has formed to analyse its options.

"Dell Technologies continues to evaluate potential business opportunities, including a potential public offering of shares of DHI Common Stock of Dell, a potential business combination between Dell and VMware and a potential conversion of shares of Class V Common Stock of Dell into shares of DHI Common Stock of Dell," the company said in the filing.

"Dell is also considering maintaining the status quo. The potential business opportunities currently being evaluated by Dell do not include the sale to a third party of Dell or VMware."

The special committee comprises independent directors David Dorman and William Green, two tech veterans who have held high-level roles in the likes of AT&T, Accenture and EMC - the last before it was bought by Dell to become Dell EMC.

The special committee has the power to wholly represent shareholders, although if a business opportunity offers the possibility of shares being modified, converted or exchanged, permission from shareholders must be obtained.

"Dell has not determined which, if any, potential business opportunity to pursue and there can be no assurance that any potential business opportunity will be pursued, the terms thereof, or whether, if pursued, any such business opportunity would be consummated," the filing continued.

Dell remains a private company since it bought up nearly $25 billion worth of shares in 2013, but wants to go public again - reportedly to ease the debts it built up in buying EMC for $67 billion in 2015.

Picture credit: Bigstock

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