![]() ![]() Denali plans to have it listed on the NYSE. On the completion of the deal, the Class V common stock will trade on either the NYSE or Nasdaq using the symbol DVMT. Also, regarding the amount of cash available for the transaction, using the Class V Common Stock allows Denali to pay a large amount in terms of the purchase price for EMC than it could using an all cash consideration. Denali thinks it is in the best interest of its shareholders after the merger to retain a large economic interest in the VMware business. The success of VMware is important to the business strategy of the merger that combines Dell and EMC. ![]() Owning EMC's interest in the VMware business is a fundamental part of Denali's strategic rationale for this merger. Upon the merger, EMC shareholders will receive shares of Class V Common Stock that will publicly trade and intended to track, to about 53% of the economic interest in VMware. In total, EMC shareholders will indirectly own about 81% of VMware as of the Jproxy statement. The "tracking stock," also called the Class V Common Stock, is being used to afford EMC shareholders the opportunity to benefit from any value created resulting from any revenue synergies of the Class V Group with Dell. Several blue chip firms have used them including: General Motors ( GM), AT&T ( T), Walt Disney Company ( DIS), and Georgia Pacific to name a few. Those used to track the economic interest in another publicly traded company are even less common. "Tracking stocks" are uncommon structures of financing. And Denali has agreed to provide $2.95B and EMC to provide $4.75B in cash on hand both at the completion of the merger for covering transactions related to the merger. The debt financing committed up to $49.5B in total, include among others, JPMorgan, Barclays, BofA Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, Goldman Sachs, and RBC Capital Markets. ![]() Dell's wife, MSDC Denali Investors, L.P., MSDC Denali EIV, LLC funds affiliated with Silver Lake Partners, and Temasek. This is from Michael Dell, and a separate trust for the benefit of Mr. Denali has committed equity financing up to $4.2B in total. The merger is to be financed via a combination of debt and equity and cash on hand. Dell and his wife's trust owned about 70% of Denali's voting stock, the investment funds associated with Silver Lake Partners owned about 24% of Denali's voting stock and other stockholders owned about 6% of Denali's voting stocks, as of May 15, 2016. Dell and his family), members of Dell's management and other investors. Dell's wife, investment funds affiliated with Silver Lake Partners (a global private equity firm), investment funds affiliated with MSD Partners, LP (an investment firm that was formed by the principals of MSD Capital, LP, the investment firm that exclusively manages the capital of Mr. Denali is owned by Michael Dell, the Chairman, CEO and founder of Dell, a separate property trust for the benefit of Mr. is a holding company that conducts business operations through Dell Inc. Let's shed some light on a few aspects of the pending merger that as shareholders we are curious about.ĭenali Holding Inc. ![]() We expect the transaction to happen on the original terms and within the originally announced timeframe."Īs with any merger, investors and shareholders alike tend to have many questions. Integration planning has accelerated to ensure we begin at full speed upon closing, the leadership team has been established, and we've received the vast majority of anti-trust approvals required. All reported as of March 31, 2016.Īs part of the first Quarter Earnings Report, (4/20/16), Joe Tucci, EMC Chairman and CEO said, "We continue to make progress on our combination with Dell. Elliott, The Baupost Group has joined in and owns 2.65% outstanding worth over $1.3B, and others have acquired shares including Third Point with 7 Million shares. And that was prior to the Denali proposed merger agreement.Įlliott Management now has 2.15% of the outstanding shares worth over $1.1B. With Elliott Management estimating the EMC stock was worth about $40 per share when it was selling for about $24 to $25 range. Activist Paul Singer of Elliott Management did have 1.86% of the outstanding shares in September with two seats on the board of directors. On October 12, 2015, EMC Corporation (NYSE: EMC) entered into the merger agreement with Denali and two subsidiaries of Denali in which it has offered $24.05 per share in cash plus 0.111 shares of VMware tracking stock. Back in September, we wrote about EMC, " Numerous Reasons to Buy EMC." Since then a lot has happened. ![]()
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