Dell to study two new buyout offers

NEW YORK, US: Dell said Monday that it had received two new acquisition offers, which could derail the US computer giant's plan for a private buyout led by founder Michael Dell.

27 Mar 2013

The company said the offers were from billionaire corporate raider Carl Icahn and investment fund Blackstone Group. Both proposals "could reasonably be expected to result in superior proposals," but further study is needed, Dell said in a statement.

Dell said its special committee, which had set a Friday deadline for offers, would continue negotiations on both offers. "We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders," said special committee chairman Alex Mandl.

"We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders, whichever transaction that may be."

Going private

In February, Dell unveiled plans to go private in a US$24.4bn deal. The private equity buyout led by founder Dell, backed by equity investment firm Silver Lake, would give shareholders US$13.65 per share. Blackstone proposed a "leveraged recapitalisation" which would offer existing shareholders US$14.25 per share, but allow those who want to hold the shares to be able to do so. Under the deal, shares would remain publicly traded on the NASDAQ.

The Icahn offer would inject an additional US$5bn into Dell, paying US$15 per share, allowing the company to remain publicly traded but under new control. The initial offer led by Michael Dell would de-list the company from stock markets and could ease some pressure on Dell. The company is cash-rich but has seen profits slump as it tries to reduce dependence on the shrinking market for personal computers.

Source: AFP, via I-Net Bridge

Source: I-Net Bridge

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