Dell to get rival buyout bids from Blackstone
Blackstone Group LP (BX) and activist investor Carl Icahn submitted proposals to buy Dell Inc. (DELL) that would rival a $24.4 billion buyout offer from Silver Lake Management LLC and company founder Michael Dell, according to people with knowledge of the matter.
Blackstone, the world’s biggest private-equity firm, outlined an offer valued at $13.65 to $14.50 a share, said one of the people, who asked not to be identified because the process is private. Icahn said he’d pay $15 a share, with a cap on the amount of cash used in the deal, two people said.
The proposals present unexpectedly serious challenges to Michael Dell’s effort to take private the Round Rock, Texasbased company he founded in 1984 as it struggles with competition from smart phones and tablets. The transaction’s strengths include the founder’s participation and his decision to roll over his 15.6 percent stake to help finance the purchase. It’s also rare for one private-equity firm to seek to break up another’s deal.
Now, Dell’s board probably will conclude in the next few days that both proposals are reasonably likely to be superior, said one of the people. Under terms of the original Feb. 5 merger agreement with Silver Lake, the board would then take time to determine whether the counteroffers are superior. At that point Silver Lake and Michael Dell, which offered $13.65 a share, would have three days to top them.
Blackstone and Icahn submitted their proposals on March 22, the deadline of a so-called goshop period designed to solicit competing bids for Dell. Southeastern Asset Management Inc. and T. Rowe Price Group Inc. (TROW), the company’s largest outside investors, have said the original deal is too cheap. The stock, which closed on Friday at $14.14, has climbed since the leveraged buyout was announced amid speculation that Dell would fetch a higher price.
A spokesman for the Dell special committee running the goshop process didn’t return calls or e-mails seeking comment. David Frink, a spokesman for Dell, Christine Anderson, a spokeswoman for New York-based Blackstone, and Icahn declined to comment.
Dell isn’t planning to disclose whether it received bids until March 25, people familiar with the matter have said.
Blackstone, working with a group, would acquire Dell’s shares while including a public stub, a security that would allow other investors to be involved in the deal.