Rumor: Dell is being acquired by its own company VMware

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Dell may be bought by VMware, a virtualization company in which Dell owns 80 percent of the shares. This construction involves a reverse listing or reverse takeover, so that Dell will be listed again after 2013.

According to sources familiar with the plans, the idea is that the acquisition will give Dell’s owners, Michael Dell and Silver Lake, shares that they can then sell on the stock exchange. This would allow them to cash in on their previous investments from 2013 when Dell was delisted, CNBC reports.

This acquisition would also be intended to raise money to pay off part of Dell’s debt burden. Neither VMware nor Dell have responded to a request for comment.

A reverse listing or takeover involves an IPO without having to comply with the usual requirements associated with a share issue. Usually this involves the purchase of a public company by a private company, but in the case of Dell and VMware, the situation is the other way around because VMware is publicly traded.

Last week there were already rumors that an IPO of a company or acquisitions by Dell are being considered. Dell would be under pressure to make changes going forward, as the sizable acquisition of business services firm EMC has not yet delivered what was expected.

That acquisition involved an amount of $67 billion in 2015, leaving Dell with a debt burden. In 2013, founder Michael Dell took his company off the stock exchange through a buy-out, in order to be able to determine the course of the company more independently.

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