Dell buyout deal: Michael Dell to invest personal wealth for majority stake?

Written on:February 1, 2013
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Michael Dell invests personal wealth

Michael Dell might invest personal wealth in buyout deal

The Dell buyout deal in nearing closure as CEO Michael Dell is believed to invest more of his personal wealth to take majority stake in the world’s third-largest personal computer maker, to make it private. Silver Lake Partners and Microsoft Corporation would become minority stakeholders in the company. Michael Dell is expected to shell out somewhere between $500 million to $1 billion (£315 million to £630 million) for the Dell buyout deal, apart from his 15.7% ownership stake in the company’s stock which is already expected to be part of the buyout.

The Dell buyout deal would mark the largest leveraged buyout since the global financial crisis. The Dell buyout deal will give Michael Dell more freedom to reshape his company in a dynamic market for personal computers and other information technology. Dell had been reporting falling profits and witnessed a global slump in personal computer sales, while cowering to rivals in the Asian markets. The final price that the consortium group would pay the Dell shareholders is not known yet. The Dell buyout consortium is believed to be working on last-minute details and the timetable could still slip, warned sources close to the deal.

Silver Lake Partners, the investment group, which held negotiations with Dell’s camp in New York yesterday, has secured up to $15 billion (£9.45 billion) of debt financing from four investment banks including Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital, said the sources. While Barclays is said to be advisor to Silver Lake in the transaction, JPMorgan Chase & Co is advising Dell.

Dell is ensuring that the buyout deal turns out to be the best one for its shareholders by forming a special committee of independent directors and has also hired Evercore Partners to assess the outcomes of the buyout deal in the best interest of Michael Dell as well as the Texas-based firm’s shareholders.

     

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