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Dell’s Plan To Go Private Said To Meet Resistance
Dell lost almost a third of its value last year and is struggling with tablet makers such as Apple
By: Maureen O'Gara
Jan. 22, 2013 08:15 AM
Dell’s board has reportedly hired Evercore Partners to make sure the deal led by Silver Lake Management to take the company private is the richest one available.
Bloomberg thinks the Silver Lake deal could be announced this week although Fox Business claims the talks have “seriously slowed” because of stockholder resistance to the “bargain” price.
Reports say the offer calls for $13-$14 a share – or between $23 billion and $24 billion – and have Michael Dell rolling his 15+% stake into the buyout.
Evidently Dell expects shareholder lawsuits. Hence, giving the boutique investment bank a go-shop contract to prove it’s the best deal around. A sweetener may not make finance sense to Silver Lake and its friends.
Dell’s enterprise value is reckoned at $19.7 billion.
Michael Dell may also need the $14.2 billion fortune Dell’s got stashed oversees to take the company private Bloomberg says.
It hasn’t paid US taxes on the money and if repatriated it could cost the company 35% less any foreign taxes unless some sophisticated tax lawyers can find a loophole like a foreign merger.
US companies have at least $1.6 trillion in untaxed earnings overseas.
Dell lost almost a third of its value last year and is struggling with tablet makers such as Apple. Going private may give it room to overhaul its corporate structure and focus on data-center equipment instead of PCs.
The buyout, financed by $15 billion from the Royal Bank of Canada, Bank of America, Barclays and Credit Suisse, would be the biggest since the financial crisis.
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