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>> "Michael S. Dell will contribute his stake [of DELL] of roughly 14 percent toward the transaction..." How does this work exactly? Does this mean that Dell
by alberth 14y ago
>> "Michael S. Dell will contribute his stake [of DELL] of roughly 14 percent toward the transaction..."
How does this work exactly?
Does this mean that Dell will no longer be an equity owner in the new private company and he's surrendering all his equity?
Or is Michael Dell simply saying, as long as I get to keep 14% of this new private entity, you don't have to pay me out on this deal to go private.
- JumpCrisscross 14y agoThe second one, Michael Dell is essentially taking equity in the surviving private entity in lieu of $13.65/sh.
- bluedevil2k 14y agoWrong again. There's tax implications that prevent him from just surrendering his shares in the company in exchange for a large equity position in a private company.
- alberth 14y agoIf JumpCrisscross is wrong, then what does that statement mean in the article that states "Michael S. Dell will contribute his stake [of DELL] of roughly 14 percent toward the transaction.."
- JumpCrisscross 14y agoI do not believe I suggested he would be surrendering his shares, but rather, that he will not be taking a cash disbursement. I believe that he will take a distribution of the OpCo's (thereby stripping the HoldCo's) to be subsumed by the local NewCo, but given the complexity of the deal I wouldn't take too many guesses. I avoided speculating on the transaction mechanics given that this is Hacker News and not FT Alphaville's Long Room - sorry if that caused confusion.
- chollida1 14y agoHe's basically saying he's voting for the transaction to go through. He'll still have his ownership.
- justincormack 14y agoNo its not quite that he is not getting the cash deal that other investors are so it must be more complex. You are not allowed to favour some shareholders over others.
- chollida1 14y ago> No its not quite that he is not getting the cash deal that other investors It is exactly that. He(Micheal Dell) is not getting the cash deal that other investors are. He is not getting the same deal that other investors are getting. It is that simple. > You are not allowed to favour some shareholders over others. No one said they could. He does however have special terms for himself in this deal.
- justincormack 14y ago"special terms for himself" is different treatment. As far as I can work out he is taking the buyout as a shareholder and then reinvesting the cash into the buyout deal, but the small print is not public.