Sources: Dell's board is meeting later this month to discuss strategic options, including an IPO and buying the rest of VMWare it does not already own
Company's board plans to discuss options later this month — After going private in 2013, firm now seeks growth, cash
Context & Ripple Effects
Two years after going private in 2013, Dell sits on roughly 80% of VMware, and its board is now weighing two opposite ways to use that asset: buy in the minority holders outright, or take Dell itself back to public markets. Within days of this report, Dell confirmed it was evaluating a public offering or a combination with VMware, and sources described a reverse merger variant that would let Dell trade without a formal IPO.
The stakes are the balance sheet from the take-private era: an IPO raises cash and forces disclosure, while absorbing VMware folds a profitable software business into a hardware company still carrying acquisition debt. The question did not die here — by mid-2020 sources had Dell examining a spinoff of its ~$50B VMware stake instead, making this board meeting the opening move in a multi-year restructuring.
First-order effects
- Dell's board must choose between two capital structures this month: a traditional IPO that monetizes the whole company, or buying the remaining ~20% of VMware, which deepens consolidation around the software asset instead.
Second-order effects
- VMware's minority shareholders become the swing constituency — a full buyout cashes them out at a premium, while a merger or listing hands them Dell exposure they did not opt into; either path reprices how the market values Dell's hardware debt against VMware's software margins.
Third-order effects
- If the pattern holds, the take-private playbook ends not with a clean IPO but with the acquired software stake serving as the currency and collateral for re-entering public markets — a template other heavily-leveraged buyouts can follow.
The trend: Leveraged take-privates are increasingly resolving through their software subsidiaries — as currency, merger partner, or spinoff candidate — rather than through conventional IPOs.