Dell Offers More Money to Investors to Ease Its Return to the Stock Market

Dell agreed on Thursday to improve a takeover offer for owners of a special class of shares to about $23.9 billion, hoping to quell a shareholder rebellion against a deal meant to return the computer maker to the public markets.

Under the terms of the revised deal, shareholders in a stock that tracks the performance of Dell’s 82 percent stake in VMware will receive a combination of cash or stock worth roughly $120 a share, representing a 10 percent increase from the original offer. Dell also increased the amount of cash available in the offer by about 55 percent, to $14 billion, which would increase the proportion of that part of the compensation.

Investors would also be able to pick an independent director to sit on Dell’s board from 2020. These VMware shareholders could own between 17 percent and 33 percent of Dell’s shares, though the company expects them to hold a roughly 20 percent stake.

The new bid won over shareholders who own more than a combined 20 percent of the tracking stock, including the investment firms Elliott Management, Canyon Partners and BlackRock. Those companies had all opposed the deal for months.

“The new terms offer a constructive compromise that we believe benefits all stockholders,” Jonathan Heller, a partner at Canyon, said in a statement.

For Dell and its partner, the investment firm Silver Lake, the deal helps clear the way for the computer maker to become a public company again. A vote on the takeover bid is scheduled for Dec. 11.

The tracking stock — known by its ticker symbol, DVMT — was born of convoluted financing that helped pay for Dell’s $67 billion takeover of VMware’s parent company, the networking storage company EMC.

Soon after Dell and Silver Lake announced their $21.7 billion deal for DVMT in July, several top shareholders criticized the offer of $109 per share in cash and stock as being too low. Dell and Silver Lake initially pushed back, arguing that the value of the tracking stock had improved significantly since its inception. They even argued that their offer was final.

The matter threatened to turn into a repeat of an effort by Michael Dell and Silver Lake to take Dell private in 2013. That endeavor drew opposition from Carl Icahn, the veteran activist investor. Dell and Silver Lake prevailed, after raising that takeover bid by a small amount and defeating a legal challenge by Mr. Icahn.

This time, Dell and Silver Lake briefly threatened to take the company public through an initial public offering, giving no concessions to disaffected shareholders. But that could have been difficult, because potential investors would probably have balked at Dell’s enormous debt load. Eventually, the company decided that the easiest option was to negotiate with DVMT shareholders.

One shareholder who did not participate in the crafting of the deal: Mr. Icahn, who sued the company this month over accusations that it withheld information about the takeover bid from investors.

In a statement on Wednesday, Mr. Icahn demanded that independent shareholders be given the right to choose at least three directors to sit on Dell’s board.

But Dell and Silver Lake are betting that they now have enough support from other investors to overcome his opposition in next month’s vote. Mr. Icahn’s share of Dell voting stock is less than 5 percent.

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