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Dell’s board evaluates rival bids: source

A special committee of the board Dell Inc. is the evaluation of proposals for separate purchase Blackstone Group and billionaire investor Carl Icah...

 

Dell's board evaluates rival bids: source

A special committee of the board Dell Inc. is the evaluation of proposals for separate purchase Blackstone Group and billionaire investor Carl Icahn to decide whether one or both are likely to prevail on an existing 24, $ 4 billion to private contract take, a source close to the talks said Sunday.

Blackstone and Icahn put in preliminary bids late last week, making the founder of PC maker 3, Michael Dell, and private equity firms Silver Lake thwart Dell to take private.

Icahn has offered $ 15 a share for 58 percent of Dell, while Blackstone offered to more than $ 14.25 per share be distributed, according to the same source. Silverlake Group has agreed to purchase the entire Dell for $ 13.65 per share.

problem to the special committee would be how the three proposals compare. Both Blackstone and Icahn consider proposals for a portion of the stock will remain listed Dell, questions about what would be reviewed increases.

Dell

can an announcement as early as Monday or any of the competing offers were reasonably likely to lead to a better proposal to make, the source said. But the source cautioned that the Special Committee of the Board of Directors may also decide to take more time to make a decision.

Blackstone and Silver Lake declined to comment. Dell and Icahn could not immediately be reached for comment.

provides unexpected rivals Dell throws the future of the PC-maker in question. A “go-shop” period – during which the target company actively seeking competing offers – in a case of this magnitude rarely leads to competitive offers Submissions could now selling Dell in a race to transform with three horses. which could drag on for months.

It may also be the future of Michael Dell, founder of the technology giant at the age of 19 with only $ 1,000 threaten. According to the plan Silverlake, the plan is about 16 percent share of the equity contract from Dell, as well as cash offer from his investment firm MSD Capital, and CEO of the company to continue. Silver Lake puts up $ 1.4 billion in the case.

Silverlake group did not plan to raise its offer or to adapt to special commission comes with Dell a decision on the proposals rivals, two sources familiar with the situation said Sunday. they said that for now, the company purchasing and Michael Dell plans to continue with their current contract.

But the current plan to take the company private has been criticized by a number of large shareholders such as Dell Southeastern Asset Management and T. Rowe Price.

The shareholders said the offer undervalues ​​the society and promised to vote against the deal, which a majority of the shareholders, except the founder passed.

Brian Marshall, an analyst at ISI Group, said in a report Sunday he did not expect the group Silverlake its offer significantly above competitive offers to increase, “given the challenges facing the PC industry and the processing time.”

Dell

stock closed at $ 14.14 Friday.

OFFERS

RIVAL

The proposal Icahn will shareholder the option of Dell choose cash or stock, but there would be a cap on the amount of money they could get, according to the same source.

In other words, if all the shareholders chose Dell cash, they can sell 58 percent of their stock, while retaining the other 42 percent will remain listed.

Icahn is advised by investment bank Jefferies Group Inc. He plans to increase its bid to finance own money, money from Dell and the new debt, the source said.

activist investor, who took an interest in Dell Dell earlier this month asked to pay $ 15.7 billion in special dividends., Is more demanding, according to the same source.

Jefferies declined to comment.

Blackstone, which recently hired former vice president Dell’s business strategy David Johnson, offered to more than $ 14.25 per share for Dell, according to the same source.

New York-based alternative investment no specified end of the offer, but has two other participating partners -. Francisco Partners and Insight Venture Partners

Insight Francisco and could not immediately be reached for comment

<. p> According to the proposal from Blackstone, Dell also a certain amount of shares traded, the source said. But, contrary to the suggestion of Mr. Icahn, Blackstone acquisition of a shareholder who wishes to give Dell proposed.

Instead, Blackstone proposes to cap the amount of shares that would be outstanding in the heel of listed shares, the source said, adding that the private equity firm did not indicate what the cap is.

Blackstone was advised by Morgan Stanley, which also gave a letter certainly of funding, according to the same source.

Morgan Stanley declined to comment.

There were also discussions about the Blackstone Group Dell financial services to sell, but is not part of the current proposal, the source said.

STEPS Next

But concerns from the fourth quarter of 2012, the share of the global PC market, Dell to just above 10 percent slipped from 12.5 percent a year earlier as deliveries fell 20 percent, according to IDC house.

Michael Dell returned to the company as CEO in 2007 after a short break, but was unable to restore to work so far. emphasis on the Dell computer company in recent years has paid off, critical note.

successfully compete with the incumbents, including IBM and Hewlett-Packard will not be easy, no matter what the structure of the company.

A source said earlier that Dell has lowered its forecast for fiscal 2013 internal operating profit of 3 billion -. sharply from $ 3.7 billion had earlier predicted The source added that more details will be revealed in a filing agent that is expected by the end of this week

Meanwhile, the Special Committee of the Board of Directors decides whether – or both – competing offers for Dell may reasonably result in higher offers, Blackstone and Icahn will have to submit binding offer for Dell. negotiations will probably take weeks, according to the same source.

At that time, the Special Committee will again have to decide whether the company offers from Icahn and Blackstone among other functions, such as the funding committed, were above the Silverlake Michael Dell once.

If they are higher, Silver Lake and Michael Dell will get a shot at their first offer to revise. Unlike most other go-shop process, where the original bidders multiple opportunities to compete come to agree, Dell has given the founder and Silver Lake have the right to do that only once.