Dell’s road to buyout almost at an end

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Dell Executive Room

It’s getting to crunch time for computer maker Dell. According to the Wall Street Journal, citing people familiar with the matter, the company is close to inking a US$23-billion deal to take itself private at between US$13.50 and US$13.75 a share.

Rumours have been flying around about the possibility of the company going private for a while now with several large banks reported to have approached Dell about financing an offer. Word on the street is that Dell’s board met last night to vote on the matter.

According to Bloomberg the deal could be announced any day now with bigwigs like Microsoft and Silver Lake Management investing.

“Silver Lake Management LLC will invest more than US$1-billion in the buyout and Microsoft … will invest about US$2-billion, one of the people said. Chief Executive Officer Michael Dell will contribute his 15.7% stake, valued at more than US$3.6-billion, and contribute US$700-million, this person said, giving him a majority stake in the company,” says Bloomberg.

Silver Lake Partners is a regular player in the tech space and is known for deals like the 2000 leveraged buyout of hard-drive maker Seagate Technologies.

If approved by shareholders, reports say this would be the largest tech buyout since the recession. The company like most PC-makers have been struggling and increasingly mobile dominated market. Dell has also seen its market share aggressively cornered by competitors such as HP, Lenovo, and Asus.

Dell, the man, founded the computer company 30 years ago with a US$1 000 in a university dorm room. Going private has been on the cards for a while. In 2010, Dell said that he had considered the move to take the company private.

Dell is one of the last of a few entrepreneurs that defined the computer revolution and this buyout will bring “an unofficial end to the era when a handful of young entrepreneurs made PCs the dominant computing device” says the Journal.

So far no one from Dell, Microsoft or Silver Lake has commented on the rumours.

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