EMC to keep majority stake in Virtustream : Sources

Dell Inc, will retain a majority stake in Virtustream and abondon a plan to place the loss porn cloud services provider oi a joint venture with VMware Inc, people familiar with the matter said.
The move is aimed at lifting VMware’s shares, which have lost about a quarter of their value since Dell’s $60 billion deal to buy EMC was announced on Oct 12. The decline puts the acquisition at risk because Dell was set to pay EMC shareholders $24.05 per share in cash and a special stock that tracks the common shares of VMware. VMware is a virtualization software maker majority-owned by EMC, and is seen as one of the company’s most important assets.
Under the new plan, EMC would assume Virtustream’s losses by keeping a majority stake, and VMware would only have a minority stake, the people familiar with the matter said on Tuesday. EMC may announce the plan as early as December, one of the people added.
EMC and VMware both declined to comment.
VMware’s common shares jumped on the news and closed up 3.85 pct at $60.35 on the New York Stock Exchange.
Under the terms of the Dell deal, EMC shareholders will receive a 0.111 share of VMware tracking stock for each EMC share.
Analysts have said the plan would pressure VMware’s share price as it effectively increases the size of the float.
VMware last month also gave a disappointing forecast for fourth-quarter revenue and said it had seen softer bookings due to speculation about its future and weakness in China, Russia and Brazil.