Michael Dell is eyeing up a listing for Dell

We knew he would be back. Just four years after claiming that Dell’s reinvention required a $25 billion go-private deal, Michael Dell is eyeing up a listing for his eponymous tech company. A Dell reflotation is one of several options that Mr Dell and his backers at private equity firm Silver Lake are currently considering. Dell became a more complex business after buying software rival EMC for $67 billion in 2016. The conceit of the management buyout was to build a scale vendor for corporate IT departments. Profiting from that means that Dell must once again engage with public investors. In the first nine months of 2017, Dell’s operating profit of $2 billion was almost evenly divided among its three segments: PC hardware, corporate storage, server and networking and VMwareWhen Dell bought EMC, much of its value came from owning 80 per cent of the listed VMware cloud and virtualisation business. The size of the two meant that Dell could not buy all of EMC for cash; it had to issue a new class of Dell stock tied to VMware. This elaborate arrangement highlights the problem in the “Dell complex” as it is known… Dell has $52 billion in debt and its most recent earnings are at the threshold where interest expense would no longer be tax deductible… Public investors and their short-term demands are starting to look more appealing. Patience is a privilege Mr Dell can no longer afford. That has implications for the price he can expect.
 
Lex.

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