After speculation that Dell could go public again after just four years as a private company, reports are emerging that the compute giant plans to raise an IPO through a reverse-merger with VMware.
According to "people familiar with the matter", CNBC said the $60bn cloud computing company, which is already controlled by Dell, would actually buy the larger company, allowing Dell to be traded publicly without going through a formal listing.
If true, this would make it the biggest deal in tech industry history, giving investors who backed Dell's move to go private in 2013 a way to monetise their deal, while helping Dell pay down some of its $50bn debt.
While sources say Dell could still pursue a more traditional initial public offering (IPO), a reverse merger would allow the company to avoid a new public offering. However, CNBC's sources added that Dell hasn't decided on a strategic option and is also considering several other paths forward, including other acquisitions or buying the remaining stake of VMware that it doesn't already own.
Dell is unlikely to sell the company outright or sell its stake in VMware, one of the people said.
VMware's stock fell sharply soon after the rumours were reported on Monday, down 8.5 per cent.
The news comes after it was reported last week that after just four years of being a private company, Dell is looking to go public again. According to Bloomberg, Dell has been considering the move for some time, and plans to go public again in a bid to raise cash and reduce the company's substantial debt.
Following weeks of speculation, Dell announced it was going private back in February 2013 in a $24.4bn deal which was realised before the end of the second quarter.
The transaction was funded by Michael Dell himself, who decided to stay on as the firm's CEO, as well as Silver Lake, MSD Capital, and a $2bn loan from Microsoft. Under the terms of the deal, Dell stockholders received $13.65 in cash for each share of Dell common stock they hold.
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