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Dell Said To Be In Buyout Talks With Private-Equity Firms

Posted by ryuzaki0 on from the dude-you're-buying-dell dept.

puddingebola writes "Dell Inc. is reported to be in buyout talks with private equity firms. From the story, 'Dell is discussing going private with at least two firms, said one of the people, who declined to be identified because the talks are private. The discussions are preliminary and could fall apart because the firms may not be able to line up the needed financing or resolve how to exit the investment in the future, the people said.'"

4 of 150 comments (clear)

  1. taking Dell's own advice by tuffy · · Score: 5, Funny

    First they give the money back to the shareholders, then they shut the company down.

    --

    Ita erat quando hic adveni.

  2. Ask Hostess How Well That Worked Out by ewhac · · Score: 5, Interesting
    We've seen this script before. The private equity firm forces the company to take out huge loans, which are then paid to the equity firm as consulting and management fees, and bonuses. Dell's largest operating cost becomes servicing the debt, which means everything else gets cut -- product research, product quality, staff, salaries. The market quickly realizes that Dell products have become shit(tier), and customers flee.

    Four years later, the equity firm is several hundred million dollars richer, Dell goes bankrupt and is liquidated, and thousands of former Dell employees are out of work.

    If you were a bank considering a loan to Dell (and not already in collusion with the private equity firm), you should be very very skeptical you will ever see your money again.

    --
    Editor, A1-AAA AmeriCaptions
    1. Re:Ask Hostess How Well That Worked Out by ISoldat53 · · Score: 5, Informative

      Not coincidentally Dell's previous Co Chairman was once a Bain consultant. Your scenario is just what Bain did repeatedly.

  3. Re:Why keep it going? by Anonymous Coward · · Score: 5, Informative

    October 6, 1997:
    "And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one.

    "What would I do? I'd shut it down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives. "

    http://news.cnet.com/2100-1001-203937.html