Round Rock-based tech giant Dell Technologies plans to interview banks this week to potentially go public through an initial public offering -- an about-face from its earlier plan to do so through a proposed acquisition, according to media reports.

Dell Technologies -- the largest private employer in the Austin metro area -- said this summer it would pay $21.7 billion in cash and stock to buy back shares tied to its interest in software company VMware to return to the stock market without a public offering.

The move to interview banks for an IPO shows there are increasing tensions between Dell and investors who have said the deal undervalues some of its stock, the Wall Street Journal reported.

READ MORE: Dell dives back into the public waters

Dell has postponed a roadshow for the VMware deal that was scheduled for this week by a week, Reuters news service reported, citing a person familiar with the matter.

Dell's IPO deliberations come as several hedge funds, including Elliott Management Corp and Canyon Capital Advisors, as well as activist investor Carl Icahn, resist a $21.7 billion cash-and-stock offer from Dell to buy back "tracking stock" from them tied to Dell's 81 percent stake in software company VMware Inc., according to both the Journal and Reuters reports.

A Dell spokesman on Monday said the company is "not commenting on the rumors."

Last month, Dell reported 18 percent year-over-year growth for its fiscal second quarter. Revenue increased from $19.5 billion one year ago to $22.9 billion, according to the company.

Robert Enderle, industry analyst at the Enderle Group, said Dell is trying to find a middle ground for the company and its shareholders.

“(Michael Dell) likes being private. He likes the amount of flexibility it gives him,” Enderle said. “They’re going to have to be creative in an environment where creativity isn’t the norm.”

Private companies like Dell Technologies can’t offer stock options for its employees, so it must remain competitive with higher salaries, Enderle said.

“We do need to take care of these employees,” he said. “It’s kind of critical that they do solve this problem.”

The original plan to buy back shares tied to VMware would have allowed Dell to bypass an IPO process in which Dell would have faced scrutiny over its roughly $50 billion debt load, most of which is from Dell's $67 billion buyout of EMC Corp.

Under the original proposal, Michael Dell would remain as CEO and chairman with a 72 percent ownership stake. Silver Lake Partners, the equity firm that helped Dell go private in 2013, would remain a 24 percent stake.

Michael Dell -- who famously founded the company from his dorm room at the University of Texas -- took the tech giant private in 2013 after facing pressure from investors who had differing opinions about the future of the company.

“We’re able to be bold, make investments and focus 100 percent on customers,” Dell said about the decision.

If Dell takes the company public again, it would go against the flexibility he had once desired, said Roger Kay, industry analyst with Endpoint Technologies.

“I do think that this may be indicative of some turmoil,” Kay said of the frequently changing financing considerations made by the company. “This thing has morphed and morphed several times.”

It’s not yet clear what the company will do if that plan is not supported by a majority of shareholders. Dell Chief Financial Office Tom Sweet said last week if tracking-stock holders reject the proposal, the company will “go back to status quo.”

?Additional material from wire services.



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