Dell opens window on efforts to sell company

Published on NewsOK Modified: March 29, 2013 at 6:46 pm •  Published: March 29, 2013
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SAN FRANCISCO (AP) — Dell 's financial advisers tried to persuade 71 potential bidders to make an offer for the troubled personal computer maker before two of them emerged to challenge a proposed $24.4 billion deal with the company's founder, according to documents filed Friday.

The wide-ranging efforts to ignite a bidding contest for Dell Inc. are among the morsels of new information contained in a voluminous recitation of the events that have thrust the world's third largest PC maker on to the auction block.

The bidding has boiled down to a group led by company CEO Michael Dell and Silver Lake Partners vying against separate alternative proposals submitted during the past week by buyout specialist Blackstone Group LP and billionaire investor Carl Icahn. The other potential suitors contacted by Dell's financial advisers weren't identified in Friday's disclosures.

For now Dell's board is standing behind its nearly two-month old agreement to sell the Round Rock, Texas, company to Michael Dell and Silver Lake for $24.4 billion, or $13.65 per share. But the board is still holding out the possibility that it might side with one of the offers from Blackstone or Icahn once they finalize their bids in the next few weeks. Blackstone has pledged to offer more than $14.65 per share for most of Dell Inc.'s outstanding stock while Icahn says he plans to pay $15 per share for up to 58 percent of the company's outstanding stock.

Dell hopes to complete a sale by Aug. 2, although it still hasn't even set a date for a shareholder meeting to approve whichever deal gets the board's final blessing.

Friday's regulatory filing provided Dell's board with its best chance yet to convince shareholders that it has gone to great lengths to ensure the company is sold for the highest possible price, given the challenges facing PC makers at a time sales of desktop and laptop machines have been declining as more people embrace smartphones and tablets.

Dell's disclosures underscored the bleak outlook in Friday's filing by including snapshots of internal financial projections that were lowered during the past eight months as the company's management and board came to grips with the depths of the PC downturn.

In July Dell's management presented a forecast calling for an operating profit of $5.6 billion on revenue of $66 billion in the current fiscal year ending in January 2014. After mulling a variety of information, Dell's board concluded the company is more likely to post an operating profit of $3 billion, a 46 percent decrease from the July prediction. The board is now planning for revenue of $56.5 billion for the current fiscal year, a 14 percent drop from the earlier forecast.



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