Two More Bids Appear on Dell's Buyout Table

On Monday, March 25, Dell said that it has received two alternative acquisition proposals: one submitted by a group affiliated with a private equity fund managed by Blackstone, and the other by entities affiliated with Carl Icahn.

The news arrived after company founder and CEO Michael Dell and Silver Lake Partners finally reached an agreement and presented a $24.4 billion offer to take the struggling PC maker private. However, insiders have claimed that current shareholders aren't impressed with the deal, believing that the company is worth more than the $13.65 per share that Michael Dell and his financial backers are offering.

With a hint of discouragement in the air, Blackstone and Carl Icahn presented a motivator. Dell's Special Committee said on Monday that both proposals could be expected to result in superior proposals, as defined under the terms of the existing merger agreement. This group plans to continue negotiations with both.

Meanwhile, feeling the possible heat, Michael Dell said he is willing to explore the possibility of working with third parties regarding alternative acquisition proposals.

According to the Blackstone proposal, shareholders who wish to cash in their stock will have the opportunity to receive greater than $14.25 in cash per share for all of their shares. Those who wish to stay with the company after the acquisition will have the opportunity to remain as shareholders and receive shares (subject to a cap) valued in excess of $14.25. Shares will continue to be publicly traded on the Nasdaq, Blackstone said.

As for Carl Icahn's acquisition proposal, he already owns approximately 6 percent of Dell shares. Dell shareholders can receive either shares of the "Surviving Company" on a one-to-one basis with their current holdings, or an aggregate of up to $15.65 billion in cash payable at a rate of $15 per share. His company is also offering an additional $2 billion of cash equity financing, and allowing Dell access to the $7.4 billion in cash that the struggling PC maker still has stashed away.

Both propositions mean a purchase of a controlling stake in Dell, not a complete buyout. This would mean the "surviving company" could offer shares for public trading, a complete 180-degrees from the direction Michael Dell wants to take.

"We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders," said Alex Mandl, Chairman of the Special Committee. "We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders, whichever transaction that may be."

Dell's announcement, along with both proposals, can be accessed here.

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  • seinfeld
    Your a looser tiffany
  • JonnyDough
    Michael Dell cannot scam consumers like he did for nearly a decade. They've finally wizened up.
  • mattblum
    Dells are pretty good as commodity box computers go. However, I will never knowingly buy anything that Ican controls. Back to building my own.
  • shahrooz
    scrolled to comment section to see the top comment, all I see is negative ratings lol :D
  • thee_prisoner
    If anything it is a smart move to go private. Dealing with big share holders is a pain. The company will be easier to manage without the big share holders getting in the way.
  • Mathos
    Going private could actually turn the company around. But, it'll probably get stuck being public and continue to chase the latest fad a day late and dollar short. As thats pretty much how publicly traded companies work. Our Cell phone carriers are an example of this, with the metered plans. Same with many other ISPs.
  • ElMoIsEviL
    JonnyDoughMichael Dell cannot scam consumers like he did for nearly a decade. They've finally wizened up.Actually consumers have become dumber... I present a rise in Apple's marketshare as proof.
  • JonnyDough
    They were tired of the Windows issues, and gravitated towards Macs as a way to get what they wanted. Unfortunately Apple is not problemless. Or maybe that's fortunate for us who like to build our own stuff. :)
  • Rhinofart
    I'm an MS guy by trade, but I run Macs at home, and when I'm out DJing a gig. My Macs just work. Can't say the same for the Windows machine some of my fellow DJs bring. 7/10 times they wind up running off of my Mac by the end of the night. BUT! I do love my PC gaming, and thus I build windows machines for that.