Dell Computers to Go Private Again in $24 Billion Deal
Computer manufacturer Dell has announced that it is being bought back by its founder, Michael Dell and the private equity group, Silver Lake and will no longer be a listed company on the US stock exchanges. If shareholders approve the deal that is.
Under the terms of the agreement, Dell shareholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The price represents a premium of 25 percent over Dell's closing share price on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published.
The board has however been working on the deal with Mr Dell since last August.
The board of directors has approved the deal, although Michael Dell, who as CEO sits on the board recused himself from all Board discussions and from the vote to avoid accusations that he drove the deal.
As part of the deal, the company has 45-days to find a better offer from another bidder.
If the deal goes ahead, then Mr. Dell, who owns approximately 14 percent of Dell's common shares, will continue to lead the company as Chairman and CEO and will maintain a significant equity investment in Dell by contributing his shares of Dell to the new company, as well as making a substantial additional cash investment.
Microsoft will also be part of the transaction, by contributing a US$2 billion loan to the company.
If completed, then this will be the largest leveraged buyout since the Blackstone Group's US$26 billion takeover of Hilton Hotels in 2007.
Dell was first listed on the stock market following an IPO in June 1988, when the company was valued at US$50 million.