Carl Icahn has said that VMware should be worth US$300 per share, the activist investor's latest bid to scuttle Dell's plan to go public by buying back shares tied to its interest in the software company.
"Based on IBM's recent offer for Red Hat, a deal we believe should have a comparable valuation to a future VMware deal, VMW should be worth $300 per share," Icahn said in a letter.
“Unlike the decaying business of PC hardware, VMware is at the forefront of the rapidly growing cloud infrastructure and business mobility software space.
“We believe that at VMware’s current trading price the market is under-appreciating VMW’s true earnings power as the uptake and ever increasing complexity of the cloud-native world will drive sustainable long- term growth.”
IBM agreed to acquire Red Hat for US$190 per share in cash, a 63 per cent premium to its closing price on 26 October.
Dell said in July it would pay US$21.7 billion in cash and stock to buy back VMware shares, returning it to the stock market without an initial public offering.
Earlier this month Icahn also sued Dell, alleging that the computer maker did not disclose financial information related to its plans to go public by buying back its tracking stock.
Dell did not immediately respond to a request for comment.
(Reporting by Vibhuti Sharma in Bengaluru; Editing by Anil D'Silva)