

Dell Inc. has written a letter to its employees saying that its deal to acquire EMC Corp. is on track, despite the appearance of a flurry of rumors to the contrary in recent weeks.
An open letter to the company’s employees, Rory Read, Chief Integration Officer at Dell, said that he wants to “address some of the chatter over the past few weeks about possible financing headwinds with the [EMC] transaction”.
He went on to “assure” readers that any rumors that Dell is struggling to finance the takeover and its debt repayments are “off-target” and do not reflect the progress the company has made.
“The debt financing is fully-committed and is being underwritten by many of the leading global banks,” Read insisted.
He went on to say that due to the nature of the transaction, “syndicating and placing the debt” takes several months to complete. However, that process is “underway and remains on track, as planned.” he added that Dell is expecting to close the deal sometime between May and October this year, as originally planned.
Read also revealed that Dell is planning to survey twenty percent of its global workforce to ask their opinions of the Dell/EMC merger. The survey will ask employees for their opinions on the following:
He said that Dell will conduct similar surveys on a quarterly basis.
Read’s comments follow a report last week from the New York Post, which said the JP Morgan-led banking consortium that’s supposed to put the financing together Dell needs to complete the acquisition, is having trouble raising the first $10 billion. The Post quoted anonymous sources as saying that the consortium had asked for a 10-day extension in order to price and sell bonds to credit markets. Dell chose not to comment on that report.
Also last week, Dell warned in an SEC filing that the recent collapse of VMware Inc.’s share price means that EMC’s shareholders are going to be left worse off than when the deal was first stuck.
The filing explained that: “Between the date the merger agreement was entered into and the date of this proxy statement/prospectus, the market value of the VMware Class A common stock has declined, thereby reducing the implied value of the stock portion of the merger consideration.”
As such, those changes will “impact the amount of cash that holders of EMC common stock will receive in the merger in lieu of fractional shares of Class V Common Stock.”
Apparently then, Dell seems to think it will get away with paying shareholders less than it originally planned to acquire EMC, even though there are a number of class action lawsuits now ranged against it.
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