Private equity firm Blackstone (BX) may be considering a last-minute bid to buy Dell (DELL), according to Bloomberg. Michael Dell and Silver Lake Management have already proposed a $24.4 billion buyout to take the company private, however the deal has been met with backlash from shareholders. Blackstone is said to be considering an offer for Dell higher than the current $13.65 per share offer. Blackstone, Hewlett-Packard (HPQ) and Lenovo (LNVGY) have all reportedly conducted due diligence on Dell, however Blackstone is said to be the only serious contender to counter Silver Lake’s bid. Dell’s board has until March 22nd to examine other options and is allowed to negotiate beyond that date if it receives a “serious” offer. Blackstone has not yet submitted a proposal to the board.
There are probably days when Michael Dell regrets ever taking his company public. AllThingsD reports that famed activist investor Carl Icahn says that there will be “years of litigation” ahead for Dell (DELL) if it goes through with its current buyout plan without making substantial changes. In particular, Icahn wants Dell to “pay a special dividend of $9 per share” to investors if they decide to vote down Dell’s proposed plan to go private later this year. Icahn says that this “proposed $9.00 special dividend gives Dell shareholders a total value of $22.81 per share, representing a 67% premium to the $13.65 per share price proposed” in the original plan. Of course, increasing the potential cost of the buyout by 67% would greatly complicate things for Dell, which has inked a delicate agreement with Silver Lake Partners, Microsoft (MSFT) and several banks who are financing debt for the transaction.
If Michael Dell really thinks he can save his company by taking it private, it looks like he’ll have to go through one of the world’s most famous activist shareholders first. CNBC’s David Faber reports that investor Carl Icahn has bought up a 6% stake in Dell (DELL) and who may block the company’s proposed leveraged buyout plan. Faber says that Icahn likely “is going to come out against the deal and urge the board to lever up to provide a special one-time dividend” to compensate shareholders. Icahn’s actions come after Bloomberg reported earlier on Wednesday that Dell had started an aggressive campaign to justify the terms of the LBO to its shareholders and explained that it had “considered options including a leveraged recapitalization, changing the dividend policy and shedding some business units” as alternatives.
The PC market is getting hit hard as tablets grow in popularity. PC sales declined this past holiday quarter for the first time in five years, and the first quarter isn’t expected to reverse PC vendors’ fortunes. According to a new report from Digitimes, however, laptop shipments are expected to climb across the board in the second quarter this year. “Toshiba is expected to enjoy a 42% on-quarter growth in the second quarter, followed by Asustek Computer with 41%, Hewlett-Packard (HPQ) 30%, Apple (AAPL) 26%, Lenovo 20%, Dell (DELL) 19% and Acer 10%,” Digitimes’ Aaron Lee wrote, citing vendors’ internal projections obtained by the site’s sources. The report also notes that Intel’s (INTC) next-generation “Haswell” processors will be unveiled in June.
Dell (DELL) is not about to let angry shareholders quash its plan to go private. Unnamed sources have told Bloomberg that Dell plans to hold a shareholder meeting to ease the concerns of investors who believe they’re being shortchanged by the company’s proposed $24.4 billion leveraged buyout deal. According to Bloomberg’s sources, “Dell and Silver Lake Management LLC are studying ways to address the concerns raised by large shareholders such as T. Rowe Price Group Inc., who said the $13.65-a-share offer undervalues the company.” More →
Michael Dell posts open letter to Dell customers, says buyout is best way to innovate for the future
Current Dell (DELL) customers may be worried about continued support for their products in the wake of Dell’s $24.4 billion deal to go private, but company founder Michael Dell is trying to set their minds at ease. In an open letter written to Dell customers on Friday, Dell said that his company’s “unwavering focus” would still be on “delivering a fantastic customer experience and creating value for your organization.” That said, Dell added that taking the company private was the easiest way to make sure that it would be able to “innovate, invest for growth and accelerate our transformation strategy.” Dell is reportedly planning to reinvent itself by developing a computer the size of a USB stick that’s capable of giving users access to every major operating system, from Windows to Mac OS X to Google’s (GOOG) Chrome OS.
Michael Dell really does seem fully committed to his plan for rebuilding Dell (DELL). Reuters reports that Dell and his investment firm have committed $750 million in cash to help secure the buyout of the company he founded back in 1984. Under the terms of the buyout, Dell is contributing $500 million of his own money while his MSD Capital firm will pitch in another $250 million. Dell earlier this week put the finishing touches on a $24.4 billion deal to take the company private after he enlisted the help of Silver Lake Partners and Microsoft (MSFT), which together have committed $3.4 billion to help buy out the firm. Most of the deal is being financed by several banks providing debt totaling around $13.75 billion and by Dell’s own 16% stake in the company.
Look upon Dell’s (DELL) works, ye gadget geeks, and despair. The Verge has put together a very comprehensive roundup of all the terrible products that Dell has released over the past decade and one major trend stands out: Most of them were half-assed attempts to follow trends that were spearheaded by Apple (AAPL). More →
HP (HPQ) seems to be taking a page from Conan the Barbarian, as the company apparently thinks the best thing in life is to watch the market crush your enemies, see them driven before you, and to hear the lamentation of their shareholders. In the wake of Dell’s $24.4 billion buyout announced Tuesday morning, HP put out a statement taunting its rival by noting that the company “faces an extended period of uncertainty and transition that will not be good for its customers” while also vowing to capitalize on Dell’s misery by swooping in to snag its old customers. More →
Following a number of reports suggesting a deal to take Dell (DELL) private was imminent, the company announced on Tuesday that a deal has been reached. Dell founder Michael Dell is leading the charge with investment firm Silver Lake, and Microsoft (MSFT) will also put $2 billion into the pot in the form of a loan. Current Dell shareholders will receive $13.65 per share, a 25% premium over the company’s closing price on January 11th, and the deal values Dell at approximately $24.4 billion. Dell closed at $13.27 on Monday. The company’s full press release follows below. More →
Michael Dell is putting the final touches on a deal with Microsoft (MSFT) and Silver Lake Partners to take Dell (DELL) private, unnamed sources have told the Wall Street Journal. According to the Journal’s sources, Dell is close to finalizing a $23 billion buyout in which founder Michael Dell will “contribute his nearly 16% stake valued at $3.7 billion and an investment firm he controls another $700 million” while “Microsoft would invest about $2 billion in the form of a subordinated debenture, a less-risky investment than common stock and Silver Lake Partners would invest more than $1 billion.” Several banks are reportedly helping fund the remaining $15 billion for the buyout through the use of debt. A final agreement hasn’t been reached yet, however, and the Journal’s sources cautioned that terms of the agreement could still change.
Dell (DELL) founder and CEO Michael Dell is reportedly near reaching an agreement that would see him take Dell private and leave him as its majority owner. The deal has been in the works for some time and according to multiple unnamed sources speaking with Reuters, it could be finalized over the weekend and announced on Monday. Earlier reports suggested Dell is working with private equity firm Silver Lake to finance the buyout, and as much as $3 billion could come from Microsoft (MSFT), pushing the world’s largest software company further into the Windows hardware business. Reuters was seemingly unable to confirm whether or not the “Dell Dude” will be brought back onboard as part of the deal.
Give Michael Dell credit — he’s apparently willing to put his money where his mouth is. Unnamed sources have told Bloomberg that Dell, the founder of Dell Inc. (DELL), is planning to spend “as much as $1 billion of his personal funds” to regain control of the company and take it private. Bloomberg’s sources indicate that Dell would combine the personal funds with his own $3.6 billion stake in the company to fund just over half of the money needed to buy out Dell. The rest of the buyout would reportedly be “financed by debt and possibly some of the $11 billion of cash Dell reported” in its last earnings report, as well up to $2 billion provided by Silver Lake Management and Microsoft (MSFT). More →