Dell Inc.’s proposed merger with EMC Corp. has prompted 15 class action lawsuits, and at least one of the suits is still being considered in a court of appeals, EMC reported Monday in a regulatory filing.The Massachusetts-based technology giant reported that 13 of the lawsuits were filed “purportedly” on behalf of EMC (NYSE: EMC) shareholders, and two on behalf of shareholders of affiliate VMware Inc. (NYSE: VMW).
Enlarge EMC Corp., led by CEO Joseph Tucci, left, with Dell Inc. CEO Michael Dell. The companies… more
A consolidated lawsuit involving nine plaintiffs was dismissed in December 2015 but it has been under appeal before the Massachusetts Supreme Judicial Court since June. The $60 billion merger, which was overwhelmingly approved by EMC shareholders on July 19, is scheduled to be completed during the third quarter that ends Sept. 30, according to the EMC filing with the U.S. Securities and Exchange Commission.
Eleven of the lawsuits alleged the merger violated the fiduciary duties of EMC directors. Some lawsuits also alleged EMC "aided and abetted the alleged breaches of fiduciary duty by the directors."
Plaintiffs in the initial 15 lawsuits include several labor organizations such as IBEW Local No. 129 in Ohio, the City of Miami Police Relief and Pension Fund and the City of Lakeland Employees Pension and Retirement Fund, the filing indicates.
The buyout, which was first proposed in October 2015, would be the largest technology merger in history. Denali Holding Inc., parent company of Round Rock-based Dell, has agreed to pay EMC shareholders $24.05 a share as well as 0.111 shares of a tracking stock related to California-based VMware.
Dell, the No. 3 computer maker in the world, employs 13,000 workers in Central Texas. The company has posted losses for the last three years. During fiscal 2016, it reported a loss of $1.1 billion on revenue of $54.8 billion compared with a loss of $1.2 billion on revenue of $58.1 billion during fiscal 2015, SEC filings show.
Last year, EMC reported a profit of $1.9 billion — well below the $2.7 billion profit it posted in 2014. Dell plans to rename the combined company Dell Technologies after the acquisition that’s being done in partnership with California-based Silver Lake Partners LP.
Christopher Calnan covers technology, finance and clean energy for the Austin Business Journal.
Comments are closed.
Byte Me Computer Services