Dell Enlists Banks To Gain VMware Stock Swap Shareholder Approval: Report

The journey of Dell Technologies becoming public again through a VMware stock swap continues, as the company is now reportedly working with banks to raise more cash in order to sweeten the deal for VMware business tracking stock shareholders.

Round Rock, Texas-based Dell is speaking with investment banks to add more cash to its $21.7 billion deal to buy back its DVMT VMware tracking stock, according to a report by Reuters, citing people familiar with the matter. To become a public company, Dell needs to win more than 50 percent of the DVMT shareholder vote, which would see Dell buy out DVMT stockholders before listing its own shares on the New York Stock Exchange.

Dell is currently offering $109 in cash for each share, not exceeding $9 billion, with the remainder payable with 1.3665 shares of Dell's Class C common stock. Following backlash from some shareholders of the proposed deal, Dell representatives have recently been reaching out to investors to see what changes need to be done to gain their support.

According to Reuters, new negotiations are underway with shareholders looking for a valuation of between $120 and $130 for each share. Dell's DVMT tracking stock is currently at $101.55 per share as of Tuesday afternoon.

[Related: Carl Icahn Ups Attack On Dell's Public Bid, Says VMware Shares Worth $30]

The company is hoping negotiations with investors will conclude as early as this week, according to Reuters. Dell did not respond by press time for comment on the matter.

Activist investor Carl Icahn has been extremely vocal about his stance against the proposal, calling it "the Michael Dell/Silver Lake buyout scheme." Icahn, who is suing Dell over the deal, owns a 9.3 percent stake in DVMT tracking stock and 2.27 million shares in VMware.

Investment firm P. Schoenfeld Asset Management (PSAM), which advises clients that own more than $150 million shares of DVMT, said last week it will vote against the proposed transaction because it is "grossly inadequate."

"Dell must increase the offered consideration by at least 20 percent to narrow the discount and value the DVMT stock more fairly," said PSAM in a letter sent to the Dell board of directors.

The critical shareholder vote will take place at 8 a.m. central time on Dec. 11 during a special meeting of stockholders at Dell's headquarters in Round Rock, Texas. The vote does not include shares held by affiliates of Dell Technologies such as Michael Del and private equity firm Silver Lake.