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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Michael Dell, the company's CEO and founder, believes he will be in a better position to engineer a turnaround if he doesn't have to cater to Wall Street's fixation on whether revenue and earnings are growing from one quarter to the next. That's why Dell would end its 25-year history as a publicly held company if its CEO's debt-laden proposal wins out. The deal would saddle Dell Inc. with more than $15 billion in debt, including a $2 billion loan from Microsoft Corp.

Blackstone and Michael Dell also have left open the possibility of working together, if Blackstone should end up in control of the company. Icahn hasn't indicated whether he would want to retain Michael Dell if his bid succeeds.

Michael Dell's deal is facing resistance from major shareholders who believe the sales price isn't high enough. Southeastern Asset Management, the company's second biggest shareholder after Michael Dell, contends Dell Inc. is worth nearly $24 per share. The Memphis, Tenn., firm had suggested that it work with Michael Dell on a buyout last June, according to Friday's filing.

A month after Southeastern floated the buyout idea, Michael Dell met with a Silver Lake representative at an industry conference and set up an August meeting to discuss how they might work together.

Silver Lake initially was competing against another unidentified buyout firm that dropped up of the bidding in early December. Silver Lake at first proposed paying $11.22 to $12.16 per share before finally settling on $13.65 per share after being prodded by Dell's board to raise its offer on several occasions, according to the company's filing.

After the deal with Michael Dell and Silver Lake was announced in early February, company adviser Evercore Partners contacted 67 different potential suitors and fielded unsolicited inquiries from four other parties, according to the filing. Only 11 of the potential bidders that spoke with Evercore were interested in exploring a deal. The documents didn't identify any of the other suitors besides Blackstone and Icahn.

To keep Blackstone at the negotiating table, Dell agreed to pay up to $25 million of the firm's expenses.