News: Company is considering opportunities to buy back tracking stock.
Dell said in a regulatory filing that it could repurchase about $3bn in VMWare tracking stock, the special class of shares the computer manufacturer intends to issue to help finance its purchase of EMC.
Under the terms of the agreement, EMC shareholders will receive about 0.111 VMware tracking share for each EMC share. The total transaction is valued at about $67bn.
Dell said it plans to consider opportunities to buy back shares. The company could support around $3bn in share repurchases and other types of payments.
The amount could increase over the time based on the company’s net income.
Dell is planning to reduce its debt in the first 18 to 24 months upon completion of the merger and achieve an investment-grade rating for such debt.
The company will have $49.5bn in debt under existing plans to finance the EMC agreement.
Dell reduced its debt by $4.5bn, including $2.5bn paid off by the company itself since it was taken private in 2013.