- 5B of compensation if the deal won't go through is not much. in the last 1.5years everything inside VMW depended from this acquisition, no goals, no scope, nothing... just waiting for the deal to go through. The damage for VMW would be more than 1.5B at least in the short term. VMW lawyers should have negotiated a bigger compensation than 1.5B
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This has to be one of, if not one of the worst-handled acquisitions in recent history. BC jumped the g-n in sending out offers or NOT sending out offers meaning that half of the company now thinks they are all about to get laid off. By not waiting for all necessary approvals they instead just assumed they would receive it. If the deal falls through you're going to have a company filled with deeply traumatized people who will have no reason to give the company their continued loyalty. The brand has been severely damaged by all of this. The question begs to be asked: Did BC not think this through?
It is amazing how BC has been in control long BEFORE the acquisition date (if there is one..)
You would think that type of stuff would quickly shut down as it is illegal, but nope.
Let’s all simply not play by the rules is my take away from this.
FTC where are you? Also asleep at the wheel I guess.
That’s not BC’s problem, let alone a reason for them to pay more on separation. It’s the responsibility of VMW management to keep the company on track and they’ve effectively been MIA since they started doing integration planning months ago. They’ve relinquished the wheel and if BC doesn’t take it then we’re headed right off a cliff
Broadcom won’t pay the breakup fee because MD will instruct VMW not to sue them for it due to the Silverlake Old Boys code. Even if they did it will be tied up in court for years and settled for ten cents on the dollar.
"I dont think Michael Dell wants 1.5B, he wants 61B instead he wants the merger, the bookies and financials sponsor all want 61B deal to be done .. Imagine 1% fee of 61B for M&A is 0.6B alone. Stakes are high to make this deal happen."
the debt on VMwares balance sheet has ensured that it's hobbled and VMware has not been able to use stock to make acquisition or the actual cashflows as they were rerouted to paying special dividends. So in the long run, the sagging valuation has MSD to blame.
The best bet would be to slowly sell the stock in the open market, allow VMware to get better governance a la Microsoft, possibly bring back some founders onto the board.
The AVGO Termination fee negotiations with the VMW board are likely taking longer than expected because of this issue. If the acquisition fails to close, as Wall Street anticipates, then the damage to our future revenue/profit prospects are significant.
As VMW leadership reacts with a Plan B scenario, let's watch how shareholders respond.
I dont think Michael Dell wants 1.5B, he wants 61B instead he wants the merger, the bookies and financials sponsor all want 61B deal to be done .. Imagine 1% fee of 61B for M&A is 0.6B alone. Stakes are high to make this deal happen.