Dell buyout 'as soon as Monday': report

Dell buyout 'as soon as Monday': report

Summary: According to reports, the deal which would send Dell private could be finalized as soon as next week.

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TOPICS: Dell
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Dell's buyout, an agreement between founder Michael Dell and private equity firm Silver Lake Partners, could be concluded as soon as Monday.

According to Reuters, a deal could be announced formally next week. Citing two sources close to the matter, the publication says that the transaction -- which will take Dell private and away from public trading -- will be fine-tuned over the weekend.

However, no deal will be announced until all of the buyout's last-minute details are ironed out.

Yesterday, reports surfaced that Dell's founder and CEO Michael Dell would be investing between $500 million and $1 billion of his own funds to secure a large enough stake to "reposition" the firm amidst not only strong competition from rival firms -- including Lenovo -- but also in order to try and carve out a new market position in a world where the general trend is moving towards mobile devices such as smartphones and tablets.

Bloomberg estimates that Michael Dell's stake is currently worth roughly $3.45 billion. By offering extra funds in equity financing, the Dell founder would be putting up over 50 percent of the total buyout price.

Silver Lake Partners has managed to negotiate with Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital to raise up to $15 billion in debt financing. In addition, it is expected that the investment group -- as well as Microsoft -- may invest between $1 and $2 billion each in order to become minority shareholders.

Dell's move to go private could be worth between $22.6 billion and $24.4 billion, equating to between $13 and $14 per share.

JPMorgan Chase & Co is advising Dell on the move to go private, and reports suggest that Evercore Partners is working to make sure that shareholders in the computing firm are getting the best deal possible.

Topic: Dell

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    Dude, you are getting a Dell!
    statuskwo5
  • Start making quality products!

    I would pay a bit more for it.
    No bloatware!
    Compumind
    • My recent purchase of an Inspiron 15z was pretty good

      The only bloatware was some Virus scanning software. I uninstalled it and added the Microsoft virus scanner and all was good. Oh, you also get a few Metro apps like Amazon, but since they are Metro they are easy to remove if you don't like it. But seriously, there is almost no bloatware on the Insprion 15z.
      A Gray
  • Not sure how this helps Dell?

    I still am not sure how this helps Dell? Nor do I understand why Microsoft would invest in Dell
    and risk upsetting other PC makers. Unless Dell plans to morph into something much different.
    I don't see how being private is of any help?
    jscott418-22447200638980614791982928182376
    • MS investment

      I think that MS really wanted to kill this deal by offering to get on board. Now it looks like it may happen they will pony up, because if the rummors are true, it will give MS a boost in the enterprise market. If the PC is dead(not completely) it makes sense to try to leverage their position in enterprise. The amount of PCs or hand helds needed for sales, just to stay solvent, is increadible. They can make a much higher margin in enterprise. If they wanted to clean up big time, they would make government only machines, after all, the government will spend $600 to $800 for a toilet seat.
      mjolnar
      • Government?

        You make it sound so run of the mill. $600.00-800.00 for a toilet seat, and that doesn't bother you? It's your tax dollars being frittered away.

        How about they just come to your door and grab that money out of your pocket rather than payroll deduction?
        inkwell
        • Government

          They've done that every day I have worked.....grabbed my money.
          DirtyDingus
        • Government? NOT!

          $800 does not buy you seats like at Home Depot. It buys a dozen custom seats that work in 0g without leaving a mess on your back side. Dell has never shown interest in this market. Their origins are in high volume units based on commodity hardware. the only custom part on early Dells was the injection molded bezel and those are dirt cheap.

          Private ownership buys the oportunity for risk. The board dumped the streak at the first inkling that it would not be an ipad killer. A shame since it was a reasonably decent performing device months ahead of the rest of the BYOD stampead. IMHO, Dell's Board punked themself on that decision. Now the company is playing catch up again when it could have been in the top 5. That's just one example, the company history is repleat with situations like this after Michael left. I hope he waists no time in cleaning house of it's management deadweight.
          Jerome.Thomas
      • You think that MS really wanted to kill this deal?

        I disagree, It not's the enterprise market they need a boost in, they're recent results show that fine.

        What this does give them is an investment in hardware engineering/manufacting, the same thing that Google has with Motorola, and Apple has with companies like P.A. Semiconductor and others.

        No, I think they heard that and jumped at the chance to have an inside track to the technologies Dell has access to.
        William Farrel
  • big customer

    Dell is a HUGE MS customer. So throwing a little pocket change their way to keep them as a happy customer makes a lot of sense.

    I wonder what this means to current Dell share holders?
    Al_nyc
    • Makes no sense for MS

      Sure, Dell is a big customer but people will still need junky Windows PC's. They will shift to HP and others.

      When Dell dies it's not like companies (the only ones that really buy Dell's garbage) will say. "Oh no, Dell is gone we have to stop buying computers!!!". They will go to another crappy PC vendor. MS will still get a sale.
      itguy10
      • Makes no sense for MS

        Yeah, it does. I've had Toshiba, HP, and Dell. Dell remains the best laptops and desktops of the group. And I've had the best service, unlike HP.

        If you buy the small office (not the consumer cheap crap) laptops, they don't come with bloatware, they are configured exactly the way you want them, and they are smoking fast.

        You get what you pay for. Pay $600.00 for a laptop, you get cheap crap. Pay $2700 for a laptop configured the way you want it, and you get a smoking hot machine that is solid and will last you 3 to 4 years of heavy use with 3 years on site support.

        Its like the difference between a Yugo and a Ford 150 truck. You get what you pay for.
        bobs2
        • what are you smoking?

          "you get what you pay for... "

          really? I paid $2100 for a Dell XPS L702X. It has been the worst POS I ever bought!
          not only has it got the well documented power cord/dc problem (falls out), but the service I have had from Dell is the worst I have ever been subjected to. I was accused of breaking my own machine when I tried to get it warranted (I'm in I.T. for over 20yrs), I had to escalate it to senior staff and threaten other action in order to get someone at dell to do something positive.

          In short, No, you certainly do not "get what you pay for..." at least you don't with Dell. I paid big bucks but got nothing but a big headache!
          jonathanaaa4
          • Get what you pay for

            I paid $1300 for an Asus G74Sx 17 inch 4 core 16gb ram, 3.5 gb video ram. That is one smoking machine. I wouldn't even look at Dell, I know too many people having problems with the machine & with the company.
            The only other machine I would have looked at, had I won a lottery, would be the panasonic toughbook line, but it's been ages since I followed Panasonic, so ther would be a bunch more research in the making.
            inkwell
          • Get what you pay for

            Lucky you. I bought an Asus machine and it was the wost thing I have eve bought in tems of hassle. When it worked it was good however it was not very reliable having to return it 3 times and the service was crap. I was actually relieved when it was stolen at Heathrow. I only bought that machine because I needed a machine urgently, I gave my Dell to my daughter so she would not fail her cource. I have had vey few problems wih Dell (3 faults in 20 years) when Ihave had problems they have been sorted eally quickly. Oh I'm an IT consultant. I pay for my machines personally.
            chrisaaaaaa20
          • buy a mac then

            That's why I would say buy a mac, but I'll shut up now : P
            theanimaster
        • My Precision Laptop is JUNK

          Work bought it for me as we're a "Dell PC" shop. We have the good sense to never use them for servers.

          It's cheaply built, been unreliable, and is utter garbage. This was a $2k laptop a few years ago.
          itguy10
        • Only ne problem

          Ford is the Canadian equivalent of Yugo. Besides corporate offices, does Ford have any other facilities in the US?
          Troll Hunter J
          • Of course they do!

            http://corporate.ford.com/our-company/operations-worldwide/global-operations-list
            statuskwo5
        • I paid $2500 for a mac laptop...

          And from overheating and freezing to other problems, anyone telling me Apple makes the adage true will only get me to laugh, because a LOT of people have had similar problems, and iFixit, my2011macbook, and other sites quickly shown how badly slopped together those things are.

          "you get what you paid for" is a myth, sold by some marketer that loved to gouge people for a living, since ethics was unknown or too difficult for him to follow, much less understand...
          HypnoToad72