New York – Dell Nears Buyout That Could Top $24 Billion

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    Dell founder and CEO Michael Dell delivers his keynote address at Oracle Open World in San Francisco, California September 22, 2010.  REUTERS/Robert Galbraith New York – Dell Inc is edging closer to an agreement to sell itself to a buyout consortium led by Michael Dell, its founder and chief executive, and private equity firm Silver Lake Partners in a deal that could top $24 billion, people familiar with the matter said on Friday.

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    The buyout consortium is negotiating taking Dell private at $13 to $14 per share, two of the people said. This translates into an equity valuation for the Round Rock, Texas-based company of between $22.6 billion and $24.4 billion.

    Dell shares were up 2.5 percent at $13.57 in afternoon trading.

    Michael Dell is expected to take majority ownership of the world’s third-largest personal computer maker while Silver Lake and Microsoft Corp would become minority investors, three of the people said.

    The transaction is set to be finalized over the weekend and the timetable could still slip, the people cautioned, asking not to be named because the matter is not public.

    The investment group, which held negotiations with Dell’s camp in New York on Thursday, has secured up to $15 billion of debt financing to take Dell private from four investment banks — Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital, people familiar with the matter said.

    Barclays is also advising Silver Lake on the transaction, along with Perella Weinberg Partners, said two of the people. JPMorgan Chase & Co is advising Dell.

    Representatives for Dell, Microsoft, Silver Lake and Barclays declined to comment. Perella Weinberg could not be immediately reached for comment.

    As part of the transaction, Michael Dell will contribute his existing stake of almost 16 percent in the company toward gaining majority ownership, sources close to the matter have said. The deal would mark the largest leveraged buyout since the global financial crisis.

    Going private would allow Dell, which has been trying to become a one-stop shop for corporate technology needs as the PC market shrinks, to conduct that difficult makeover away from public scrutiny.

    Dell has formed a special committee of its independent directors and hired Evercore Partners Inc to assess whether the company is getting the best deal for shareholders and not one that is just in the best interest of Michael Dell, several people familiar with the matter have told Reuters previously.


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    4 Comments
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    cbdds
    cbdds
    11 years ago

    I hate hese deals where the same CEO is setting a “fair” price to sell shares that he and others in his group are buying. If he think sit is such a great deal then let him run the company for the benefit of current owners, the ones he works for as CEO.

    Geulah
    Geulah
    11 years ago

    He owns the lionshare of the shares he’s selling and buying. Michael Dell wants to rescue his company from the speculators who bet while calling themselves analysts. The outcome may affect the PC world and PC availability.

    PashutehYid
    PashutehYid
    11 years ago

    He is gambling his own personal fortune. If company ever fails, he loses everything. Why risk this?