Two of Dell’s largest shareholders have made a new takeover bid for the struggling computer company that will challenge a previous offer from Silverlake and Michael Dell. Activist investor Carl Ichan and Southeastern Asset Management on Friday announced a new plan that would give current Dell shareholders the option keep their stock and receive either $12 per share in cash or $12 in additional shares valued at $1.65 per share. The offer counters a $24.4 billion bid led by Dell founder Michael Dell and private equity firm Silver Lake Partners to take the company private. Icahn and Southeastern hold a combined 13% stake in the company, compared to the 16% controlled by Dell and Silver Lake. More →
Blackstone Group has withdrawn its bid for Dell less than a month after proposing a last-minute offer for the struggling computer company. The private equity firm withdrew its bid after “discovering that Dell’s business was deteriorating faster than previously understood,” Bloomberg reported. Blackstone previously offered the company $14.25 per share to counter a previous bid from founder Michael Dell and Silver Lake Management’s amounting to $13.65 per share. Investor Carl Icahn is also interested in the company and offered to purchase an additional $2 billion worth of Dell’s stock at $15 per share, and to provide $2 billion of cash equity financing.
Despite negative reception and poor sales, Dell remains committed to Microsoft’s Windows RT operating system. The company has confirmed that it plans to release “future generations” of ARM-based tablets that will be lighter and faster than before, IDG News reported. Neil Hand, Dell’s vice president, acknowledged that adoption hasn’t lived up to expectation, although he believes the platform has a good chance to succeed once users become more familiar with the new tile-based interface. More →
Despite ill omens, the IDC report about PC volume decline hitting -14% in the first quarter shows once again how much trouble the tech industry is having when it comes to dealing with the ongoing computer meltdown. As I wrote last December, IDC has been completely out to lunch about this key trend for years. In March of 2012, IDC was still expecting “desktop and laptop sales to take off in the second half of 2012.” Last December, IDC cheerfully predicted 1.2% growth in computer sales between 2012 and 2016. Of course, the PC industry is tucking into a majestic swan dive that makes those projections downright surreal. How can one of the most respected research firms in the computer sector be so disconnected from reality? The answer is simple: Analysts from largest research firms simply aren’t allowed to call major turning points. More →
There’s a good reason Dell (DELL) wants to go private and back out of the traditional PC business: Because it thinks selling computers based on Microsoft’s (MSFT) Windows operating system is quickly becoming a dead end. Forbes points us to a recent proxy statement filed with the Securities and Exchange Commission where Dell outlines the risks of remaining a private PC manufacturer and paints a very grim picture for the PC industry overall. More →
Dell (DELL) on Monday confirmed that it has received two alternative buyout offers from private equity firm Blackstone (BX) and investor Carl Icahn. It was previously reported that Blackstone was considering a last-minute buyout offer for the struggling computer company that would be higher than Michael Dell and Silver Lake Management’s proposal of $13.65 per share. After conducting due diligence, Blackstone formally proposed an offer to Dell’s board that values the company in excess of $14.25 per share, while Icahn’s offer includes purchasing an additional $2 billion worth of Dell’s stock at $15 per share and offering $2 billion of cash equity financing. More →
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.