Dell founder seeks majority control with own funds
01 February 2013
Dell founder, Michael Dell is seeking majority control of Dell Inc through a buyout that would use his 15.7 per cent stake in the company combined with as much as $1 billion of his personal funds, Bloomberg reported quoting people familiar with the matter.
The people who asked not to be identified because the talks were private, added Michael Dell might contribute equity financing of $500 million to $1 billion. Dell, the PC maker he founded in 1984, was nearing a buyout led by Silver Lake Management LLC, with Microsoft Corp providing part of the funding.
Michael Dell holds a 15-per cent stake in the company, according to data compiled by Bloomberg, that has valued his stake at $3.45 billion, based on the closing price 18 January.
According to analysts, going private and pushing his ownership stake past 50 per cent would allow Dell to reposition the company as PC sales dropped with an industry wide shift to mobile and cloud computing, without the scrutiny and stock fluctuations that came with being publicly traded.
With the stake contribution worth about $3.6 billion at yesterday's closing price, and another $500 million to $1 billion, Michael Dell would be putting in over 50 per cent of the $8 billion to $9 billion equity check, with the remainder of the balance financed by debt and possibly some of the $11 billion of cash Dell reported it had as of 30 September.
The deal would come as the largest leveraged buyout since the global financial crisis and the transaction was set to be finalised over the weekend but the buyout consortium was working on last-minute details.