Insiders are worried that the IRS could kill the $67 billion Dell-EMC deal
REUTERS/Steve Marcus
So he and his dealmakers have come up with a clever way to buy the company using a combination of borrowed cash ($24.05 per share) and something called a "tracking stock" (around $9 per share) that represents and is tied to EMC's 81% controlling interest in VMware.
Dell is hoping the IRS will view the tracking stock for VMware as a tax-free exchange of equities.
And even if it does and the deal is approved as is, Dell is expected to have a whopping $50 billion of debt on its books.
But the IRS might throw a wrench into that, and view that tracking stock as something that is taxable.
If that happens, the tax bill could make EMC prohibitively expensive for Dell and kill the deal altogether.
Insiders are pretty worried about an unfavorable IRS ruling, reports Re/Code's Arik Hesseldahl, citing people close to the deal. (Hesseldahl goes into detail on the mechanics of the applicable tax code, and why Dell thinks the worst-case scenario won't apply.)
It all adds up to the fact that this huge acquisition is not yet a sure thing. Meanwhile EMC's stock is down about 9% since the deal was announced, and VMware's stock is down about 17%.
- Ghost shopping malls surged 59% in 2023, 16 retail centres shut across top cities
- Top-selling cars in India in April 2024 – Tata Punch continues to dominate
- Apple Let Loose event today – What to expect, where to watch the live stream and everything you need to know
- Happiest Minds Tech Q4 profit up 25% to ₹72 cr, co hopes to see growth in GenAI vertical
- Uttarakhand forest fire: Poor visibility hampers IAF's firefighting efforts
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market