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While the bulk of its offer will be in cash, Dell also plans to
pay EMC shareholders with "tracking stock" that follows the
value of the 20 percent of VMware that EMC does not own, the
people said on Friday.
A deal could be announced as early as next week, assuming that
financing arrangements and the remaining negotiations are
completed, the people said.
The sources asked not to be identified because the negotiations
are confidential. Dell, EMC and VMware did not immediately
respond to requests for comment. EMC shares ended trading on
Friday up 2.5 percent at $27.86 after tech website Re/code
reported that Dell was offering $27.25 a share for EMC in
addition to stock in VMware.
An acquisition of EMC would strengthen Dell's presence among
corporate customers at a time when Michael Dell is trying to
transform his three-decade old PC company into a provider of
complete enterprise computing services.
EMC has been under pressure from Elliott Management Corp to spin
off VMware. The activist investor has said EMC's structure of
combining several businesses obscures "enormous" value.
Dell - which has about $12 billion in debt, according to
Bernstein analyst Toni Sacconaghi - went private in 2013 in a
deal worth $25 billion, less than half EMC's current market
capitalization.
(Corrects headline to replace repeated reference to Dell with
EMC)
(Reporting by Greg Roumeliotis in New York; Editing by Christian
Plumb)
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