Dell cleared for $25 billion buyout, will remain committed to PCs

By on September 12, 2013, 4:30 PM
dell, pcs, buyout, michael dell, private

Dell shareholders have approved a $25 billion buyout proposal led by founder Michael Dell to take the company private. The decision ends months of opposition from shareholders Southeastern Asset Management and activist investor Carl Icahn, the latter of which just recently decided to pull out of the conflict and withdraw his rival takeover offer because he said it was "impossible to win.”

Michael Dell is partnering with private equity firm Silver Lake to finance the deal, along with a $2 billion loan from Microsoft. According to the announcement, stockholders will receive $13.75 in cash for each share of Dell common stock they hold, plus payment of a special cash dividend of $0.13 per share to stockholders of record as of a date prior to the effective time of the merger, for total consideration of $13.88 per share in cash.

“This is a great outcome for our customers and our company,” Michael Dell said on a conference call. “In taking Dell private we plan to go back to our roots, focusing on the entrepreneurial spirit that made Dell one of the fastest growing and most successful companies in history.”

He specifically mentioned a "multi-year" endeavor to expand into new areas such as enterprise, cloud computing and security services as one of the first moves in sight. Despite a slowdown in the PC market, Dell says end-user computing remains an important focus and they’ll continue to invest in consumer focused PCs and tablets.

The buyout is expected to close by November 1 and will see Michael Dell own 75% of the company. That will make it easier to move in new directions and pursue new investments as he attempts to turn things around, “without the scrutiny, quarterly targets and other limitations of operating as a public company.”




User Comments: 11

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treeski treeski said:

Should be interesting to see what happens. Dell has come up with some really neat products, but often they're not implemented very well.

psycros psycros said:

And just what is Microsoft getting out of the deal, hmmm?? Granted, they've always been tight with Dell, but $2 billion ain't or old time's sake.

MilwaukeeMike said:

And just what is Microsoft getting out of the deal, hmmm?? Granted, they've always been tight with Dell, but $2 billion ain't or old time's sake.

Good question... stock options maybe? 4-5% interest at least.

Props to Dell for not allowing themselves to fade into obscurity. I'd like to know how he's going to 'go back to our roots, focusing on the entrepreneurial spirit that made Dell one of the fastest growing and most successful companies in history." Dell came along right at the beginning of the PC boom, just like Apple snagged the beginning of the smartphone boom. To Dell's credit Gateway isn't a player anymore, so Dell did do pretty well, but I don't see another new market showing up like PCs or Smartphones anytime soon.

kevin_p0 kevin_p0 said:

Dude, you're gettin' a Dell!

captaincranky captaincranky, TechSpot Addict, said:

Yeah, that's exactly what the world needs least of, one more private equity firm.

If Michael Dell thinks stockholders are a pain in the a**, wait till he gets a load of his new puppet masters.

Railman said:

Yeah, that's exactly what the world needs least of, one more private equity firm.

If Michael Dell thinks stockholders are a pain in the a**, wait till he gets a load of his new puppet masters.

Private equity firms are taking over businesses as they have an unfair advantage. They are often based off shore so they don't have to worry about domestic taxation on their profits. They are acting like vampires and most Governments are doing very little to curb them.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

They are acting like vampires and most Governments are doing very little to curb them.
You don't bite the hand that feeds you.

1 person liked this | Railman said:

They are acting like vampires and most Governments are doing very little to curb them.
You don't bite the hand that feeds you.

I see you are as cynical as me!

1 person liked this | captaincranky captaincranky, TechSpot Addict, said:

I see you are as cynical as me!
And in turn, you're all as cynical as me....

(I get all fuzzy inside when I know that I've been a "good, bad influence" .

GhostRyder GhostRyder said:

Personally, I hope this goes well because ill always have some spot in my heart for them. However, in recent years, I never would recommend a dell to anyone because of the horrid designs and ideas implemented into their machines to hold us back from doing anything to our machines.

It made me angry when my last dell Laptop had issues with overheating and total system failure about 3 times (IE new motherboard, new HDD twice, and a new GPU). While I still stand by their support being top notch, the fact that ive had nothing but issues from them in recent years detoured my business over to other companies (At least for laptops, have not bought a desktop in about 8 years lol)

I can see this hopefully moving Dell back to the Dell I used to love.

JC713 JC713 said:

Yeah lets see what happens.

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