Dell Inc.’s estimated $67 billion deal to buy EMC Corp. has several elements:
■ Cash: EMC shareholders would receive $24.05 for each share of EMC stock they own.
■ Tracking stock: Because EMC owns 80 percent of VMware Inc., Dell is proposing that each EMC shareholder get a new “tracking” stock, at a rate of 0.111 shares per EMC share. The tracking stock would be publicly traded and connected to VMware’s price, analysts said, allowing EMC shareholders to either sell their shares or hold them in hopes of reaping a return if VMware’s price climbs under Dell’s leadership. The combined cash-and-stock offer values EMC stock at $33.15 a share.
■ Go-shop clause: EMC is allowed to seek better bids, which could complicate shareholder approval. One good sign for EMC management was the immediate approval of the Dell deal by Elliott Management Corp., the hedge fund manager that had been pressing EMC to break itself up for about a year.
■ Dell’s side: Dell, now privately owned, said it would put together the sale price by selling stakes in the company to investors, using cash it has on hand, and borrowing money. In a press release, Dell and EMC said they had “strong track records of cash flow generation and debt reduction.”
■ Leadership: Dell founder Michael Dell would be chairman and chief executive of the combined organization. Longtime EMC leader Joe Tucci, who had been working without an employment contract as he arranged a path to retirement, will continue as chairman and CEO of EMC “until the transaction closes,” the companies said.
■ Headquarters: Dell plans to combine its server business with EMC’s data-storage business, and that operation will continue to be based in EMC’s hometown of Hopkinton. The Dell corporate headquarters will continue to be in Round Rock, Texas.