Dell has been a private company for more than 4 years now, and it seems that being a private company isn’t enough anymore. Sources have told CNBC claiming that Dell is looking at a “reverse merger” with VMware where the virtual machine making company would buy its parent and let the newly formed company go public without having to launch a fully new stock offering. This would allow Dell to pay off some of its roughly $50 billion debt that it’s carrying right now.
Even though sources have told CNBC that Dell is interested, nothing is set in stone. Sources also said that a number of alternatives are still on the table, which includes a straight ward way of public offering, other potential takeover offers or even buying the remaining 20 percent stake that’s outstanding in VMware. It’s highly unlikely that Dell would sell itself to an outside company or give up control of VMware.
We reached out to Dell for and they declined to provide any comment.
Dell previously went private at a time when it was really struggling to stay afloat. They needed the freedom to restructure without having pressure coming in from being a publicly traded stock. Even after going private, things still aren’t a whole lot better for the company. Dell still posted a $941 million net loss in its latest quarter, due in part because of the company paying off $1.7 billion debt it owes. The company is in a stronger position than it was in 2013 and relies less on its PC business. A reverse merger could definitely help the company cut costs and raise funds it needs to open more opportunities and pay off outstanding debt.