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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.
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