Two Outside Bids For Dell Threaten Founder's Buyout Plan

An anonymous reader writes "Seven weeks ago, Dell announced a definitive agreement to be taken private by a group led by founder and CEO Michael Dell and the private equity firm Silver Lake Partners, assisted by a $2 billion loan from Microsoft and debt financing from a group of big banks. The deal was valued at $24.4 billion ($13.65 per share of Dell common stock), but allowed for a 45-day "go shop" period for alternative bids to be submitted to a special committee of Dell's board. Not all large shareholders were happy with the price, and early this month billionaire investor Carl Icahn threatened to tie up the buyout in court unless a large special dividend was paid to shareholders — without showing interest in buying the company himself. More recently, the private equity firm Blackstone Group jumped into the fray, and by Friday night's deadline both Blackstone and Icahn had submitted bids for Dell exceeding the original $13.65 per share agreement. Blackstone is said to be interested in installing Oracle's Mark Hurd as CEO, replacing Michael Dell. As Hurd was fired as Hewlett Packard's CEO in 2010 for alleged sexual misconduct involving an outside consultant named Jodie Fisher, he might have difficulty landing another CEO job at a publicly traded company; the Dell position could be an intriguing fit for both sides."

Comments

Re:What's the business plan?

[alen]

they don't

private equitty wants cash. they will "buy" dell, load them up with debt and special dividends and then take the cash for themselves leaving dell with lots of debt

$2B from Microsoft

[bill_mcgonigle]

I'm surprised this opportunity hasn't given Microsoft the impetus it needs to do the "whole widget" thing, like it seems to envy in Apple. Really, with Microsoft owning Dell, many of the corporate players who buy IBM, HP, et. al. would quickly jump ship to avoid the finger-pointing the 3rd parties are capable of getting away with. Since the DoJ consent decree is expired, it would seem like the right time, but perhaps this becomes easier after the private sale is complete.