Pundits have been forecasting that the pending IPO of software maker VMware Inc. could be the hottest tech offering since Google went public in 2004.
    But investors who buy into the 11 percent stake of the software maker that EMC Corp is selling will find themselves with virtually no say in how the company is run.
    EMC has set up a dual-tier voting structure for shareholders to ensure this is the case. 
    It controls 300 million class B shares, each of which has 10 times the voting rights of the 75 million class A shares in the company. It’s planning to sell just 33 million class A shares in the IPO.
    At the end of the day EMC may only own 89 percent of VMware, but it will have a stunning 99 percent of the voting power.
    “EMC will have the ability to control all matters affecting us,” VMware said in its amended prospectus. It mentioned that those areas run the gamut from the selection of directors to setting corporate business plans, policies and M&A strategy as well as managing financing activities.
    EMC spokesman Michael Gallant said that his company was following the example of half a dozen other companies who had sold business units to the public.
    “This type of structure is normal in situations where a parent company is carving out a portion of a subsidiary,” he said, though he wasn’t immediately able to cite an example of others who had taken this route.
    Increasingly it seems companies are seeking to have it both ways — full access to the stock markets but without a lot of the baggage (such as shareholders’ rights) that used to go with it.  Private equity firm Blackstone Group, which went public last month, also came up with a structure that gave its shareholders precious few rights, and its buyout rival KKR is set to follow suit with its IPO later this year.  Perhaps we should have taken EMC CFO David Goulden more literally when he told the Reuters Global Technology, Media and Telecoms Summit in May that “if I could have my cake and eat it too, I’d like to take it public and not dilute (it).”

(writing by Jim Finkle)
    
 (picture: David Goulden at Reuters Summit in May)