Will Dell’s Buyout Offer Ever Be Finalized?
Shareholder anger over Silver Lake’s low offer for Dell (NASDAQ:DELL) has not entirely dissipated, but sources familiar with the matter told The Wall Street Journal on Monday that the company was close to finalizing a $23 billion deal to take itself private at a price between $13.50 and $13.75 per share.
The fact that the computer company’s founder and chief executive Michael Dell has decided to go private is an important moment in the struggling personal computer industry, as the company’s buyout “marks an unofficial end to the era when a handful of young entrepreneurs made PCs the dominant computing device,” stated the publication. But the buyout will be the largest transaction of its kind since the financial crisis, if it ever materializes.
Private-equity firm Silver Lake Partners will invest more than 1 billion, Dell’s chief executive will add his 16 percent stake in the company, valued at $3.7 billion, the investment firm he controls will contribute $700 million, and Microsoft (NASDAQ:MSFT) will invest approximately $2 billion in the form of a subordinated deventure, which is a less-risky investment than common stock. Microsoft is not expected to get a seat on the company’s board, but the two companies will likely tighten their commercial relationship. A source told WSJ that Dell and Microsoft will come to an agreement over the use of the Windows operating system.
In addition, four banks will finance approximately $15 billion in debt to help fund the deal…