Michael Dell would be considering a return to the stock market, a little over four years after he took his PC-company private in a $25 billion buyout, according to Blloomberg. If Dell opts to go public it would be likely to pursue a direct listing or a full merger with VMware, the publicly traded cloud and virtualization solutions company that it already controls, says Bloomberg.
After Michael Dell took his company private, backed by investing company Silver Lake (a judge had ruled that Mr. Dell had underpaid by 28 per cent, but this decision was overturned last month), they had the deal with the $67 billion purchase of storage company EMC.
Going public now would provide a way for Silver Lake, the private equity firm that has backed Michael Dell’s deals, to sell part of its stake. Now that the stock markets are reaching new highs, it would give Dell a currency to mount further deals. Going public again would also provide a new way to raise capital, says Bloomberg, following their huge debt load take on with the EMC deal.
Another source told Bloomberg that the consideration of an IPO by Dell was not prompted by a need for fresh capital, and that Dell already had way to raise cash if needed.
Another option Dell would be eyeing is a public share sale for its Pivotal Software cloud computing venture. Dell would have met with bankers last year to discuss this possibility. They would have been told that the company could fetch a valuation of $5 billion to $7 billion. As a cloud software and services firm, Pivotal was once a joint venture of VMware, EMC and General Electric and became part of Dell after the EMC acquisition.