Dell’s long-pending spinoff of a controlling stake in VMware is set for Nov. 1.
Anton Garin/Dreamstime.com
Dell Technologies on Tuesday said it expects to complete the long-pending spinoff of a controlling stake in VMware to Dell holders on Nov. 1, to holders of record on Oct. 29.
The spin covers the entire 81% stake in VMware (ticker: VMW) held by Dell (DELL).
Dell holders will receive about 0.44 VMware shares for each Dell share they own. Cash will be issued in lieu of any fractional shares. The transaction is intended to be tax-free to Dell holders.
As previously announced, right before the spin, VMware will issue an $11.5 billion special dividend to shareholders, including Dell. The precise per-share amount of the dividend will be announced on the Oct. 29 record date for the payout, VMware said Tuesday. Dell has previously said it will use its portion of the payout—more than $9 billion—to pay down debt.
As noted in a recent bullish Barron’s feature story on the company, Dell last month said it expects annual sales growth of 3% to 4% for the next four years and 6%-plus yearly growth in earnings per share.
Dell stock in Tuesday trading edged up 0.7% to $109.41. Driven by anticipation of the spin and strong PC demand, Dell shares are up more than 49% for the year to date.
Write to Eric J. Savitz at [email protected]
