(Reuters) - VMware Inc (N:VMW) and Pivotal Software Inc (N:PVTL) are negotiating a deal for VMWare to acquire Pivotal, according to a regulatory filing from Dell Technologies Inc (N:DELL) on Wednesday, valuing Pivotal, a maker of software development and management tools, at about $4 billion.
Pivotal shares jumped 63% to $13.60, while shares of VMWare were down about 3% at $148.25 in extended trading. Dell is the controlling stockholder for both the companies. Dell's shares dropped 1.65% to $47.80 in after-market trading on Wednesday.
Special board committees at both companies are negotiating an agreement to acquire all of the outstanding shares of Class A stock of Pivotal for cash at $15 a share, according to a regulatory filing.
The offer price represents an 81% premium to Pivotal's Wednesday close. Shares of Pivotal, which provides tools for software developers working with cloud services from different companies, have fallen 49% this year.
VMWare provides cloud computing and virtualization software and services.
Pivotal confirmed that it was in discussion with VMWare but said a definitive agreement between the companies has not been executed.
The VMware Special Committee has requested that Dell exchange Pivotal Class B stock for VMWare Class A stock.
Dell and the VMware special committee are discussing a to-be-agreed upon exchange ratio, the regulatory filing showed.
Michael Dell and Dell owned 131.3 million shares of Pivotal Class B stock, not including the 44.2 million shares of Pivotal Class B stock held by VMware, according to the filing.