8-KOther Events

Dell Technologies Inc. 8-K Report, Corporate Update (Aug 24, 2017)

Filed August 24, 2017For Securities:DELL

Summary

Dell Technologies Inc. (DELL) has filed an 8-K report detailing significant updates to its Class V Common Stock Repurchase Program and a stock sale involving VMware Class A common stock. The company's Board of Directors approved a second amendment to the Class V Group Repurchase Program, authorizing an additional $300 million in share repurchases of Class V Common Stock over a six-month period. This expanded repurchase program is intended to be funded by proceeds from the sale of VMware Class A common stock. Furthermore, Dell has entered into an agreement with VMware for the purchase of $300 million worth of VMware Class A common stock by VMware from Dell's subsidiary, EMC Equity Assets LLC. This transaction is expected to occur in two closings, with an initial closing on September 14, 2017. The proceeds from this sale are earmarked for the Class V Common Stock repurchase program but may be used for other corporate purposes at the discretion of the Board. Investors should monitor the execution of the share repurchase program and the impact of the VMware stock sale on Dell's capital structure and liquidity.

Key Highlights

  • 1Dell Technologies authorized an additional $300 million in share repurchases for its Class V Common Stock, extending the program for six months.
  • 2The expanded repurchase program is expected to be funded by proceeds from the sale of VMware Class A common stock.
  • 3Dell entered into an agreement for VMware to purchase $300 million of its own Class A common stock from Dell's subsidiary, EMC Equity Assets LLC.
  • 4The sale of VMware stock will occur in two closings, with the initial closing anticipated for September 14, 2017.
  • 5The total number of VMware shares purchased will be based on a volume-weighted average price less a 3.5% discount.
  • 6Proceeds from the VMware stock sale are primarily designated for Class V Common Stock repurchases but can be reallocated by the Board.
  • 7The Company previously repurchased $500 million and an additional $300 million of Class V Common Stock under earlier authorizations of the program.

Frequently Asked Questions

The original program authorized $500 million, which was fully repurchased. An amendment extended it to $300 million, and this latest second amendment adds an additional $300 million, bringing the potential total for the current expanded authorization to $300 million. The total amount repurchased under previous phases of the program was $800 million.

The repurchase of shares under the August 2017 Class V Group Repurchase Program is expected to be funded from the proceeds received by Dell from the sale of VMware Class A common stock to VMware.

Dell's subsidiary, EMC Equity Assets LLC, will sell $300 million worth of VMware Class A common stock to VMware itself. This is part of a larger agreement, with an initial closing expected on September 14, 2017.

Yes, while the proceeds are primarily intended for the repurchase of Class V Common Stock, the company's Capital Stock Committee and Board of Directors have the discretion to use these proceeds for other purposes.