Dell set to table $33 a share takeover bid for EMC Corp
12 Oct 2015
Dell Inc. is set to table a $33 a share takeover bid for EMC Corp in a deal that would value the world's largest data storage company at more than $55 billion.
The proposal includes a tracking stock in VMware Inc. valued at about $8 a share that would be issued to EMC shareholders, Bloomberg reported, citing a person with knowledge of the matter.
Dell is in talks with banks about raising at least $40 billion to fund the deal, which may be announced as soon as next week, the report said.
EMC had acquired VMware in 2004 for $625 million in cash and sold 15 per cent of the company in 2007 in a New York Stock Exchange IPO.
VMware is currently valued at $32.3 billion, while EMC has a market cap of $53.6 billion.
A potential deal between Dell and EMC would bring together the world's second-largest server company and the largest data storage company as the industry shifts focus to mobile and cloud computing.
Dell was taken private by founder Michael Dell in 2013 for about $25 billion and currently has debt of about $12 billion. The Texas-based company is now talking to JPMorgan Chase & Co., Barclays Plc, Bank of America Corp, Credit Suisse Group AG and Deutsche Bank AG others for funding the deal, according to reports.
Massachusetts-based EMC provides data storage, information security, virtualization, analytics, cloud computing and other products and services that allow companies to store, manage, protect, and analyze data.
Its smaller competitors are NetApp, IBM, Hewlett-Packard, and Hitachi Data Systems.