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Dell’s plans to go private get a little simpler with one investor’s offer withdrawn

Posted: , by Maxwell R.

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Dell’s plans to go private get a little simpler with one investor’s offer withdrawn
The founder of Dell Computer, Michael Dell announced intentions to take the company private in a leveraged buyout earlier this year. The offer on the table was $24.4 billion, or $13.65 per share. The deal was put together by Michael Dell, private equity firm Silver Lake and a $2 billion loan from Microsoft.

Shortly thereafter, activist investor, Carl Icahn, who owns a significant amount of Dell stock, and opposed the plans to go private, made a competing offer which would give Dell an investment infusion of about $2 billion and give shareholders the option to cash out at $15 per share. The company would remain publicly traded, but would also take on a significant amount of debt in the process, a little over $5 billion. 

A competing buyout offer was also tendered by private equity firm Blackstone Group. Blackstone offered $25 billion to buy Dell. That worked out to $14.25 per share for those that cashed out. Shareholders that opted to stay in would receive shares “valued in excess of $14.25” and the company would remain publicly traded, albeit closely held by the group assembled by Blackstone.  Blackstone’s plan was to remove Michael Dell as CEO after the takeover. Mr. Dell said he would support Blackstone’s offer only if he would remain on as CEO.

That will no longer matter now since Blackstone and its investment partners have taken their offer off the table completely, leaving shareholders one less prospect to consider. Michael Dell currently owns 14% of the company he founded. He wants to take the company private in an effort to better position the company while the PC market adjusts to the era of tablets and mobile devices.

source: CNET

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posted on 19 Apr 2013, 04:55

1. eisenbricher (Posts: 970; Member since: 09 Aug 2012)


Good decision by Dell! This way they can operate more firmly in their own way rather than having to worry about volatile stock market. A fact that PC and Laptop industry is moving downward this move was a good strategy to keep themselves immune.

posted on 19 Apr 2013, 07:01

2. subliminal (Posts: 1; Member since: 19 Apr 2013)


I'm still amazed to this day that Dell has even got their heads above water.
I can speak to experience with their laptops, and even the Streak.
Every single laptop I've gotten from Dell, has broke with in 4 months.
I know that isn't the case for everyone, but I think that is flat out not acceptable.
On top of the sub par hardware they sell, their customer service has been nothing but a joke.

posted on 19 Apr 2013, 07:58

3. QWIKSTRIKE (Posts: 829; Member since: 09 Mar 2010)


Dell use to be a quality company, but trying to satisfy stock investors rather than invest in quality R&D killed them. They started making cheap products using the quality name they built in the past and the cheap products caused their stock and their name to fail. Hopefully they can reinvest in the quality type of machines that they used to build in the mid 1990's

posted on 21 Apr 2013, 20:37

4. MyJobSux (Posts: 77; Member since: 01 Apr 2012)


I deal with Dell products on a daily basis. Servers, workstations, laptops and printers. I have seen some lemons, there have been some motherboards with faulty diods but all in all the support has been great. Allbeint i deal mainly with Gold level support and not the average home user support (which is sub'd to overseas and is, lets just say, difficult). I doubt the PC will go away because of the surge in tablets and mobile devices. If nothing else, the need for servers still remains. Im not an HP fan but their servers build software was easier to use then Dell's. In any case, I hope Dell is able to get his company back. Im interested in seeing where he takes it.

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