Last-minute bids for PC maker Dell may be out of the blue, but it is possible that Michael Dell may up his offer in turn.
Private equity investment firm Blackstone and Carl Icahn are considering the last-minute move as a means to snatch the company out of Michael Dell's grasp, but a superior bid could seriously rock the boat, as reported by Bloomberg.
Citing sources familiar with the matter, the publication says that Blackstone and its financier Icahn have made bids that exceed the $24.4 billion buyout deal offered by the firm's founder and private equity firm Silver Lake Management. This may be excellent news for shareholders previously disappointed by the original bill — which one investor labelled as "selling Dell on the cheap," — but for Michael Dell's plans to transform the PC maker, this could scupper his intentions to make the company a strong competitor within the tablet and cloud computing markets.
Blackstone has reportedly offered a figure beyond $14.25 a share, whereas Icahn has said he will pay $15 a share for 58 percent of Dell's stock — and the board has voted to enter negotiations with the company and investor. The proposals were submitted on March 22, at the end of the "go shop" period that is in place to allow interested investing parties to submit bids for a buyout.
If Michael Dell and Silver Lake want to stay in control, they may have to counter with a higher bid. An analyst survey conducted by Bloomberg suggested that their bid could reach between $14.90 to $15 a share, a jump from the original price of $13.65 a share.
Jayson Noland, analyst at Robert W. Baird, told the publication:
"Michael wants to play a role here. This is his company — it's been his life, his name's on the door, and he'd like to be part of the next stage. The most likely scenario is Silver Lake and Michael Dell take this company private for something north of what they're currently offering."
Investors may find that the last-minute bid is more palatable to their tastes, not only due to the higher amount on offer, but as the proposal apparently includes the stipulation that investors not only can participate in the future of the company, but are able to choose whether or not to hand in their stake — something the original buyout does not include.
This may be enough to silence angry investing parties, including Southeastern Asset Management and T. Rowe Price Group, which have already said they will oppose Michael Dell's bid on the grounds of it being too low.
Dell was once the world's largest PC maker, but has seen profits slide following a general shift in the market towards mobile devices including smartphones and tablets. Whoever decides to invest must keep this in mind if they wish to help the ailing firm regain its former superiority in the technology industry.
Update 11.36GMT: According to Reuters, Dell has confirmed that the offers have been recieved from Blackstone and Icahn.