If the Dell-EMC merger is completed, it would cement the once consumer-targeted computer company as one firmly placed to run the ICT of major corporations.
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“Dell and EMC are increasingly competing with the likes of Amazon, Google, Microsoft, and others that have deep pockets”. Similar to eBay-PayPal, investors want to see the more innovative and profitable company move away from its older and less successful owner. The process began in late July or early August, Re/code said. In a nutshell, while many EMC shareholders will likely argue breakup value is in the $35-$38/share range and we strongly agree, it appears that Tucci/Board would rather go down the aisle with Dell than pursue a breakup as the clock approaches twelve with Elliott looming.
Combined that would bring the per-share buyout offer to more than $30, CNBC reported.
The deal may or may not happen this week, according to sources.
EMC may come without VMWare, its $32 billion (£20 billion) subsidiary that many investors say should be spun-off into its own company.
Analysts on Wall Street, however, aren’t as optimistic that Dell could afford such a financially debilitating acquisition.
“We continue to believe that the mere existence of conversations with Dell are consistent with our belief that EMC’s board is continuing a strategic review of myriad options, the outcome of which will be beneficial to shareholders”, said Sanford Bernstein analyst A.M. (Toni) Sacconaghi, Jr.in a research note this week.
Dell still holds a lot of debt, $11.7 billion (£7.6 billion) according to recent stats. And that only cost the company half of what it’s looking to spend now. “The key question is whether Dell could raise the capital needed to take out EMC”, voiced Um.
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Meanwhile, EMC is still in possession of a software-development company called Pivotal, and the network-security provider RSA, with no confirmation coming as to whether they would fall under the Dell umbrella.
