Seagate shareholders have approved a deal to sell the manufacturer's core disk drive business to a group of private investors for $2bn to lower the tax bill expected from the sale of its stake in software vendor Veritas.
Seagate acquired 128 million shares in Veritas last year as part of the latter's purchase of Seagate Software. But because of the differing fortunes of the two companies those Veritas shares are now worth more than the whole of Seagate's core business.
In the latest deal, Seagate will sell its stake back to Veritas as well as sell its disk drive business to a group of private investment companies.
Going private accelerates Seagate's employee share option scheme, which in turn opens up a financial loophole that shelters the company from having to pay tax on the massive profits it will make from offloading the shares.
As a public company, Seagate is valued at $11bn, but the new owners will pay only $2bn. As soon as the law allows, the company could float again and potentially make another considerable profit.
Seagate chief executive Steve Luczo, who replaced the fired founder Al Shugart, said the company is now "like the world's biggest startup".
Being a private company will allow executives to concentrate on expansion or new technology investments without having to worry about shareholders and quarterly earnings reports, he added.
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