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Michael Dell, 2013 Justin Sullivan/Getty Images
Michael Dell, 2013

Dell Reports Rising Sales Before Vote on Stock Market Return

Recent milestones make it very likely that a majority of shareholders will approve the current offer to go public.

Nico Grant (Bloomberg) -- Dell Technologies Inc., the world’s largest private technology company, reported robust sales growth in its last financial disclosure before investors vote on a transaction that would return the company to public markets.

Sales rose 15 percent to $22.5 billion, the Round Rock, Texas-based company said Thursday in a statement. Analysts had, on average, expected $22.06 billion for the period that ended Nov. 2, according to data compiled by Bloomberg.

Key Insights

The hardware maker sped up this earnings release to give investors more information about the company’s performance before a vote on taking the company public.

Dell recently sweetened its transaction offer to shareholders of its tracking stock to a maximum of $120 a share in cash and stock, from $109. Dell also has offered investors the option of receiving 1.5 to 1.8 shares of its tracking stock DVMT, depending on the value on the 17 days around the Dec. 11 vote.

The company has secured the support of 17 percent of current holders of DVMT shares and activist investor Carl Icahn has dropped his lawsuit against the company that claimed Dell’s offer wasn’t fair -- making it very likely that a majority of holders will approve the offer.

Dell reported adjusted earnings before interest, taxes, depreciation and amortization of $2.43 billion. The company paid down $1.3 billion of its large core debt burden in the most recent period.

Market Reaction

DVMT shares, the tracking stock that acts as a proxy of Dell’s stake in VMware Inc., was little changed in extended trading Thursday. The stock rose 30 percent this year through Thursday’s closing price. VMware’s shares ticked down about 1 percent after reporting revenue and profits that narrowly exceeded analysts’ estimates.

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