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Dell gets $5 billion loan commitment for proposed class V stock buy
By Sara Rosenberg
New York, Nov. 15 – Dell Inc. has received a commitment for an up to $5 billion incremental term loan A due Feb. 8, 2019 to fund its proposed acquisition of class V common stock, according to an 8-K/A filed with the Securities and Exchange Commission on Thursday.
Upon closing on the transaction, the incremental term loan maturity will be extended to 364 days from the closing date.
The incremental loan is expected to be replaced with secured or unsecured debt or a combination of the two.
As committed, pricing on the incremental loan is Libor plus 175 basis points with a 0% Libor floor.
Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc., RBC Capital Markets and UBS Investment Bank are the joint lead arrangers and bookrunners on the debt.
Under the proposal, class V stockholders can elect to receive for per share either $120 in cash, subject to an aggregate $14 billion cap, or between 1.5043 and 1.8130 shares of class C common stock.
Immediately following completion of the proposed transaction, the class V stockholders will own about 17% to 33% of Dell Technologies, depending on the amount of cash and stock elections and the final exchange ratio.
The proposed transaction remains subject to approval by a majority of class V stockholders and customary conditions.
The stockholder vote for this transaction is scheduled for Dec. 11, and closing is expected by year-end.
Dell is a Round Rock, Texas-based technology company.
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