"The Merger Agreement contains allocation and proration provisions that are
designed to ensure that 50% of the aggregate shares of VMware common stock
outstanding immediately prior to the completion of the Transaction will be
exchanged for the Cash Consideration and the remaining 50% of the aggregate
shares of VMware common stock will be exchanged for the Stock Consideration.
As a result of the proration provisions, no guarantee can be made that you will
receive the form of Merger Consideration that you elect."
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Are Dell and Silver Lake going to get 100% stock? I’m betting yes as the uber rich always play by a different set of rules.
Read the book sent by VMware announcing the May 2022 proposed agreement, page 96 & 97.
Page 96, 2nd to last Paragraph reads: "Accordingly, depending on the elections made by other holders of VMware common stock, a holder of VMware common stock may receive a portion of the merger consideration in the form such holder did not elect."
This is a no brainier due to Broadcom stock price right now, $872.30. Most likely 100% of VMware stockholders are going to select the stock election. Being that the case, the rules that apply would be the ones mentioned on page 97 under "Undersubscription of Cash Election Option."
Formula to determine how much cash you might receive if you select the Stock option consideration is: x * y = cash
x = # of stock election shares
y = fraction
- numerator = shortfall # of shares exceeds the total number of Non-Election shares
- denominator = total # of stock election shares
The numerator number won't be available until after the election deadline (see page 4, question 5 of Election Information Booklet and Frequently Asked Questions).
Remaining number of holder's Stock Election shares will be converted into the right to receive the stock consideration.
This is definitely a gamble; you don't know what you are going to get before making the selection. You can sell your shares in the open market or take a leap of faith.
This is the link to access the book about the proposed agreement.
https://www.sec.gov/Archives/edgar/data/1124610/000114036122035833/ny20005454x1_defm14a.htm
This is the link to access the booklet:
https://ir.vmware.com/websites/vmware/English/3100/events-_-presentations.html
That’s my understanding. If you do not make an election, then your shares will be assigned to the bucket that fewer people elect.
Read 3.4 in full, in particular:
- 4 (a) (ii) (B) 2) "If the Shortfall Number exceeds the number of Non-Election Shares, then all Non-Election Shares shall be converted into the right to receive the Cash Consideration, [...]"
What happens to Non-Election Shares depends the percentage of VMW shares that fall into the Cash Election, Stock Election, and Non-Election buckets.
Given where AVGO is currently trading, it is reasonable to assume the vast majority will be in the Stock Election bucket, meaning that any Non-Election Shares will get cash, as specified in 3.4 (a) (ii) (B) 2).
This is covered in sections 3.3 and 3.4. Search that document “non-election shares” to see how they will be treated.
Section 3.4. Proration; Exchange of Shares.
- 4.a.i.A:
"all Stock Election Shares and Non-Election Shares shall be converted into the right to receive the Stock Consideration"
“That is simply not true.
Here's the filing, point it out to me, if what you say is true.
https://www.sec.gov/Archives/edgar/data/1730168/000119312522161016/d525235dex21.htm”
This is covered in sections 3.3 and 3.4. Search that document “non-election shares” to see how they will be treated.
It should be fine. We already have prepared.
If you think it doesn't matter, don't vote. Please don't vote
I haven’t received the election email. What gives?
If you do not make an election, you will end up with $142.50 for each share of VMW that you own.
That is simply not true.
Here's the filing, point it out to me, if what you say is true.
https://www.sec.gov/Archives/edgar/data/1730168/000119312522161016/d525235dex21.htm
Can’t wait to hear the news that Dell and silver lake get 100% in avgo stock.
Wait for it. They don’t want to pay taxes and have thought about this a long time ago. Remember the tracking stock shenanigans? Financial engineering at its finest.
You are correct that the ultimate allocation will be 50/50, but you are very wrong that your election won’t count. Anyone not making an election will be assigned to the undersubscribed category. Nearly everyone that makes an election will take AVGO because it’s worth so much more. If you do not make an election, you will end up with $142.50 for each share of VMW that you own.
It will be in equal proportionate to everyone as voted by majority shareholders. If it is in favor or 50:50 then everyone will get 50% stock and 50% cash.
yes, voting won't make a difference