Will Dell Go Private or Not?
Analysts have given their admonishments and expressed their doubts, but even so, negotiations between the struggling computer manufacturer Dell (NASDAQ:DELL) and at least four major banks have reached an advanced stage. Sources familiar with the matter told Reuters on Tuesday that buyout firm Silver Lake, which will orchestrate the deal to take Dell private, has lined up Credit Suisse (NYSE:CS), Bank of America (NYSE:BAC) Merrill Lynch, Barclays (NYSE:BCS), and RBC (NYSE:RY) as possible financiers.
Earlier Tuesday morning, CNBC reported that private equity investor Wilbur Ross gave the deal a 50-50 chance of becoming a reality because the buyout’s leverage sponsors and equity sponsors would have to “buy into the theory that [Dell] was really going to turn around quickly.” With the company’s earnings “in a kind of free-fall” and its business failing to catch up to the current technological trend, that possibility seemed unlikely to Ross. Bloomberg Television’s Jon Erlichman also found the leveraged buyout option doubtful, as private equity deals are “about fixing a business and creating more value for the players involved.”