Still, the $9 billion, which could be split among DVMT, Dell and VMware shareholders via an exchange ratio, may need to be skewed toward VMware shareholders who are otherwise reluctant to approve a larger, more diversified combined company saddled with debt and lower-growth hardware.
Earlier this week, T. Rowe Price, the largest institutional VMware shareholder, said publicly it opposed a potential merger. T. Rowe owns about 12 percent of all outstanding class A shares.
Jericho Capital, which owns about 1.8 percent of outstanding shares, sent a letter to VMware’s board of directors earlier this month outlining other potential acquisitions for VMware that would keep the company on a higher growth trajectory.
Jericho also said a deal was “highly concerning” because it would use VMware’s cash to “go towards servicing Dell’s debt instead of towards share buybacks or strategic acquisitions.” Dell has about $52 billion in debt.
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