Wrong again. There's tax implications that prevent him from just surrendering his shares in the company in exchange for a large equity position in a private company.
I do not believe I suggested he would be surrendering his shares, but rather, that he will not be taking a cash disbursement. I believe that he will take a distribution of the OpCo's (thereby stripping the HoldCo's) to be subsumed by the local NewCo, but given the complexity of the deal I wouldn't take too many guesses.
I avoided speculating on the transaction mechanics given that this is Hacker News and not FT Alphaville's Long Room - sorry if that caused confusion.
If JumpCrisscross is wrong, then what does that statement mean in the article that states "Michael S. Dell will contribute his stake [of DELL] of roughly 14 percent toward the transaction.."
No its not quite that he is not getting the cash deal that other investors are so it must be more complex. You are not allowed to favour some shareholders over others.
> No its not quite that he is not getting the cash deal that other investors
It is exactly that. He(Micheal Dell) is not getting the cash deal that other investors are. He is not getting the same deal that other investors are getting. It is that simple.
> You are not allowed to favour some shareholders over others.
No one said they could. He does however have special terms for himself in this deal.
"special terms for himself" is different treatment. As far as I can work out he is taking the buyout as a shareholder and then reinvesting the cash into the buyout deal, but the small print is not public.
How does this work exactly?
Does this mean that Dell will no longer be an equity owner in the new private company and he's surrendering all his equity?
Or is Michael Dell simply saying, as long as I get to keep 14% of this new private entity, you don't have to pay me out on this deal to go private.