It's been a while since we last heard anything about Dell's possible acquisition. Last we heard, Dell had received two alternative acquisition proposals. One proposal was submitted by a group affiliated with a private equity fund managed by Blackstone. However, it seems Blackstone's offer is now off the table and the firm has no intention of buying Dell anymore.
The Wall Street Journal cites people familiar with the matter that say Blackstone went to Texas last week and was concerned by the results of due diligence reviews. According to these sources, Blackstone sent out a letter to the special board committee in charge of the deal detailing its reasons for rescinding its proposal. Among those reasons were Dell's declining operating income as well as declining personal-computer sales industrywide.
The Blackstone proposal, announced by Dell last month, would see Blackstone acquire Dell in a leveraged recapitalization transaction where shareholders could choose to receive either all cash or stock (subject to a cap), in each case valued in excess of $14.25 per share. In comparison, CEO Michael Dell and Silver Lake Partners presented a $24.4 billion (or $13.65 per share) offer to take the struggling PC maker private.
As far as Carl Icahn's acquisition proposal is concerned, he already owns approximately 6 percent of Dell shares. According to his proposal, 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.