Last month, Carl Icahn drew a line in the sand. Ginny Rometty’s generosity towards Red Hat shareholders could only mean that cloud computing company VMware was worth twice as much as it was going for at the time, and that he’d accept nothing less than half of that for the tracking stock based on VMware that Dell issued three years ago to regain access to public markets that Carl Icahn thought it shouldn’t have left in the first place. Which was a problem, because Dell was offering $109 per tracking share, including a bunch of what he expected to be nearly worthless new Dell shares to be issued.
As it turns out, however, Icahn was a bit more flexible in this go-around, and so when Dell offered an extra $2 billion in a new deal featuring $5 billion in extra cash, Uncle Carl was happy to go along, especially given the symbolic level that took the deal to.
Dell’s final offer had an implied value of about $24 billion, including $14 billion in cash and the remainder in shares of the future publicly traded Dell. In a unique twist, the exact consideration was tied to how DVMT shares trade…. Mr. Icahn withdrew his proxy fight and lawsuit after Dell increased the deal terms….
Dell was taken private in a $24.4 billion leveraged buyout.