Dell Confirms It Could Pursue IPO Or VMware ‘Combination’

Dell is considering a return to public ownership or a “combination” with VMware, which it acquired in the blockbuster takeover of EMC in 2016.

Speculation about the future structure of Dell has increased in recent weeks, with reports suggesting it was looking to raise revenues, either through an IPO or through acquisitions, to help pay off the debt it accrued as the result of the EMC deal.

And now, in a filing to the US Securities and Exchange Commission (SEC), the company has confirmed it is evaluating its options.

Dell future

“Dell Technologies is evaluating potential business opportunities, including a potential public offering of Dell Technologies common stock or a potential business combination between Dell Technologies and the Issuer,” it said. “Dell Technologies is also considering maintaining the status quo.”

A return to public ownership would be a surprise given the publicity that greeted Michael Dell’s takeover back in 2013. Operating as a private company, he claimed, would allow Dell to be flexible and take a long term strategy – something that would be difficult with the constant glare of shareholders.

On top of that, Michael Dell told Dell EMC World last year that being privately owned removes the potential issue of employees or customers being influenced by “activist shareholders” trying to influence the business strategy, which Dell highlighted as being a growing trend.

In response to the SEC filing, VMware said it could not comment.

“We are not in a position to speculate on the outcome of Dell’s evaluation of potential business opportunities,” said VMware CEO Pat Gelsinger. “Dell has been a tremendous partner since it became our majority owner and as we’ve accelerated our growth.”

“The VMware Board of Directors is committed to creating value for, and protecting the interests of, all stockholders,” added Paul Sagan, lead of the VMware board of directors. “The Board of Directors follows sound corporate governance practices, and will continue to do so in connection with any potential transaction involving our controlling stockholders.