Dell wants to go private at $13 to $14 per share, sources say

By on January 16, 2013, 5:00 PM

As we reported yesterday, Dell is reportedly in talks with a couple of firms interested in taking the company private. A day later we have learned that private-equity firm Silver Lake Partners is among those interested, according to people familiar with the situation as reported by the Wall Street Journal. The PC vendor is looking to sell at a slight premium above the current valuation of $21.8 billion, so between $22 billion to $25 billion.

In order to reach that goal, Dell would need to price their shares at between $13 to $14 each; they sit at $12.61 as of writing. In addition to the private-equity firm, Dell CEO Michael Dell and at least one other investor would comprise the buyout group. Together, the group would need to come up with roughly $2 billion in equity.

CNET points out that Michael Dell could use his existing stock, roughly 16 percent of the comapny's shares, to help fund the process. His stock in the company is worth around $3.6 billion.

Dell, much like several other PC vendors, are currently struggling in a weak market where sales and earnings have been on the decline due to a number of factors like the overall global economy and the rise of smartphones and tablets. If you need evidence of this, look no further than Dell’s overall value which once sat at over $100 billion.

It’s unclear at this hour if executives will actually go through with the deal or not but doing so would allow the PC maker to do a bit of restructuring without having to appease public shareholders. We will continue to keep a close eye on this one to see how it plays out.




User Comments: 4

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Littleczr Littleczr said:

I really like the Dell Ultrasharp U2711 I have. Wonder if it would affect those type of monitor sales.

lchu12 lchu12 said:

Can anyone explain how this will effect Dell and the industry?

What are the pro and con with this move?

I read the last part, but is that the only reason...

captainawesome captainawesome said:

What is going on with TS's spellcheck nowadays??

"As we reported yesterday, Dell is reportedly in talks with a couple of fims"

SCJake said:

Can anyone explain how this will effect Dell and the industry?

What are the pro and con with this move?

I read the last part, but is that the only reason...

Everything on wallstreet (publically traded companies) is driven by the populace, who, in general, is dumb. So Dell going private would give them A LOT more freedom in what they do as it would keep them out from under the public's thumb, and it would also give them a lot more freedom government wise. There are a lot more things affected by going private, but it basically boils down to those 2 things. Also lets them keep a lot more of the money that they actually earn in house instead of wallstreet fees, paying shares when someone sells, etc.

Personally all companies should stay private, but thats just my opinion

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