FILE PHOTO: The Pivotal Software logo is depicted on the floor of the New York Stock Exchange in Manhattan neighborhood of New York, New York, USA, April 20, 201
(Reuters) – VMware Inc ( VMW.N ) and Pivotal Software Inc ( PVTL.N ) negotiate an agreement for VMWare to acquire Pivotal, pursuant to a regulatory filing by Dell Technologies Inc ( DELL. N ) on Wednesday, valuing Pivotal, a software development and management tool manufacturer, for around $ 4 billion.
Pivotal shares jumped 63% to $ 13.60, while VMWare shares were down around 3% to $ 148.25 in extended trading. Dell is the controlling shareholder for both companies. Dell shares fell 1.65% to $ 47.80 in aftermarket trading on Wednesday.
Special board committees in both companies negotiate an agreement to acquire all outstanding Pivotal Class A shares for cash at $ 15 per share, according to a regulatory filing.
The offer price represents a 81% premium to Pivotals Wednesday close. Shares of Pivotal, which provides tools for software developers working with cloud services from various companies, has dropped 49% this year.
VMWare provides software and services for cloud computing and virtualization.
Pivotal confirmed that it was in discussion with VMWare, but said that a final agreement between the companies has not been executed.
The VMware Special Committee has requested that Dell swap Pivotal B shares for VMWare Class A shares.
Dell and the VMware Special Committee are discussing an exchange relationship to be agreed, showed regulatory filing.
Michael Dell and Dell owned 131.3 million shares of the Pivotal B share, not including the 44.2 million shares of the Pivotal Class B share held by VMware, according to the filing.
Reporting by Ankur Banerjee in Bengaluru; Editing by Cynthia Osterman