Dell has received a second counter-offer related to its plans to go private, with rival bids coming in from private equity fund manager Blackstone and entities associated with investor Carl Icahn.
Reports of the offers surfaced in recent days. They come after Dell founder Michael Dell and equity fund Silver Lake Partners announced plans in February to take the company private. That proposal included a ‘go-shop’ period where Dell could entertain offers from third parties in order to ensure shareholders get the best deal.
A special committee has concluded that both Icahn’s and Blackstone’s offers "could reasonably be expected to result in superior proposals, as defined under the terms of the existing merger agreement," according to a statement Dell released Monday.
Michael Dell has also told the committee of "his willingness to explore in good faith the possibility of working with third parties regarding alternative acquisition proposals," the statement added. The special committee will now negotiate with all three parties.
Dell and Silver Lake are offering $24.4 billion, or $13.65 per share for the company. The group raised its bid by $4 billion in six stages during negotiations, according to the statement released Monday.
But Blackstone’s offer would give shareholders the choice of receiving either all cash or stock, with each being valued "in excess of $14.25 per share," according to the statement. Dell would also continue to be traded on the NASDAQ exchange.
Meanwhile, Icahn’s group would seek to acquire up to 58% of Dell’s outstanding shares, offering $15 per share up to an aggregate of more than $15 billion in cash. Icahn Enterprises already controls 80 million shares of Dell.
It wasn’t immediately clear whether Michael Dell’s group would seek to top either offer.
Dell has suffered from declining profits and revenue as the PC market slumps, and has been trying to focus on more profitable software and services offerings. Going private would allow the vendor to make changes in the business without the pressure from Wall Street faced by public companies.
But major Dell shareholders have balked at the founder’s bid, saying it greatly undervalues the company.
IDG News Service
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