Report: Dell said to be considering buyout and going private

Report: Dell said to be considering buyout and going private

Summary: According to a new report, Dell is looking into going back to being a private company.

SHARE:

As several high-profile tech IPOs crashed and burned last year, could the new trend in 2013 be going private? We'll have to wait and see, but it's possible we could be seeing at least one major PC maker doing just that.

According to a new report from Bloomberg on Monday, Dell is said to be in buyout talks with at least two private equity firms. Furthermore, Dell has been said to have reached out to "several large banks" about potential financing for the deal.

Although no sources were named beyond "two people with knowledge of the matter," Dell shares on the Nasdaq were initially up by approximately 12 percent shortly after the Bloomberg story was published.

zdnet-dell-stock-jan-2013-14

Bloomberg also cited that the company's CEO, Michael Dell, owns approximately 16 percent of the company.

Thus, that provides extra fodder for the switch to operating as a private company because it would supposedly make it "easier for firms to put together equity financing for the deal."

ZDNet reached out to Dell for comment about the report. David Frink, a spokesperson for Dell, replied that the Round Rock, Texas-based corporation doesn't comment on rumor or speculation.

Screenshot via Nasdaq

Topics: Dell, Hardware, Laptops, PCs, Tech Industry

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

8 comments
Log in or register to join the discussion
  • interesting business model!

    So DELL once complained about the Windows RT. We now know that the company was in dire business situation and was looking for scapegoat. However, it is good to see that they are now doing what they should have done long time ago.

    From experience, DELL machines used to be challenging at work. Sometimes they would function well and other times, you would keep rebooting them. I think HP is following this tantalizing business - use the cheapest components to build machines sold to businesses.

    I also wonder my Sony machine out lasts and out performs DELL and HP machines, who cost dear when the companies are buying them. My current work laptop cost the company I work for £1,400.00, yet it cannot much my private £699.00 Sony laptop! It is really mind boggling.
    Wonder.man
  • Good Move

    Enough chasing investors! Get them out of the picture and get back to doing what you need to do to build the business.
    happyharry_z
  • I can understand going public in order

    to raise needed capital for starting up, but, IMO, any company that doesn't go private as soon as possible is foolish. Private companies are much, much freer with how they spend their money to grow the business.
    baggins_z
  • Circling the Drain

    Never good when you "go private". Usually a last ditch attempt at staying afloat that often fails.
    Given the dismal results for Dell's sales in Q4 (http://www.gartner.com/it/page.jsp?id=2301715) and they will be in 3rd place in the USA, behind Apple.

    Looks like Mikey Boi is taking his advice - closing up shop and giving the money back to shareholders.

    F-You Dell and your garbage computers.
    itguy10
    • LOL! More "wisdom" from itwannabe10

      Never good when you "go private'? Really? So now you can answer to your customers, and not your investors.

      And how exactly is that bad?

      Once again, more hate filled nonsense for the wannabe It guy.
      William Farrel
      • Re: Never good when you "go private'?

        Yes, because it means you've given up trying to get investment money on the open market--you just can't compete with more attractive options for investors' money.

        Look at what led up to Seagate going private, for another example.
        ldo17
        • Attract Investors?

          Unless you constantly dilute your stock (which big, slow growth companies rarely do) then the only investment money you get is with the initial offering.

          What you DO get are a bunch of short term investors demanding dividends or stock buybacks.

          By going private you no longer have to payoff the owners and you don't have to deal with a tremendous amount of regulation. You also have a lot more freedom of operation. Depending on the debt servicing this can be good or bad.

          If things get really bad you can always re-float the stock.
          SlithyTove
  • They're fading

    Dell's products use to be safe, if boring buys in years past, especially their Latitude models and their big black PowerEdge servers, but in recent years, their quality has been pretty random. But they've always been just a IBM-compatible clone maker since their PCs Limited days and nothing's ever really changed. They've fallen well behind both HP and Lenovo in the PC market, and I wouldn't be surprised to see them being overtaken by Acer and maybe even ASUS by next year.
    JustCallMeBC