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Dell Confirms and Details Rival Bids From Blackstone and Icahn
DavidGilbert99 writes "Dell has confirmed it has received 'two alternative acquisition proposals' from billionaire investor Carl Icahn and the world's largest equity firm Blackstone. These bids rival the $24.4 billion offer made by co-founder Michael Dell and equity firm Silver Lake last month, who want to take the company private. Dell also confirmed details of the two offers, with both exceeding Michael Dell's original offer of $13.65 per share, with Blackstone offering $14.25 and Icahn offering $15 per share."
That is what everybody said about Apple when Steve Jobs came back.
And the reason why Michele wants to take Dell private is so he can do some radical things to it. So who knows? Give the man the benefit of a doubt, grab some popcorn, and see what happens - assuming Michele get the company.
No story mentions that. He certainly doesn't have 26.8B dollars. Is it a bluff to get the dividends he wanted?
Probably, it is a bluff, but Mr Icahn is the king of leveraged buyouts (basically you take a loan out to buy the company with the company you bought as colateral). Kind of like how you buy a house with a loan, except the "house" (well actually the company that holds the house as an asset) really owes the money, not you.
Why would someone invest the money for a leveraged buyout (LBO)? It's because the debt is generally structured in tranches with different terms and interest rates, rather than one big lump. The senior tranches generally yield a low interest rate but are backed by a higher percentage of the collateral so you can attract more risk-adverse money. The junior tranches generally have a high interest rate for those with the stomach (much higher than a typical bank loan, so it is more profitable, but more risky, essentially junk bonds). With a typical LBO structure people can make different types of bets on the same loan segmenting the secondary loan market making it much easier to attract the money from the capital markets than a straight-up monolithic loan of $28.6B with uniform risk profile.