Blackstone, Icahn Bid For Dell

Mar 25 2013 | 1:33pm ET

The Blackstone Group and Carl Icahn have turned Dell Inc.'s leveraged buyout into a bidding war with Dell founder Michael Dell and private equity firm Silver Lake Partners.

Both Blackstone and Icahn made offers to the company at the end of its "go-shop" period Friday and will continue talks with both sides to see if an offer superior to the $24.4 billion going-private deal Dell struck with Michael Dell and Silver Lake last month can be reached.

Blackstone Management Associates is offering $14.25 per share for Dell, $0.60 more per share that the Silver Lake bid, which also includes Microsoft and Michael Dell's hedge fund, MSD Capital. Icahn, who owns 4.6% of Dell, has offered a $5 billion equity commitment, in which existing Dell shareholders could receive new shares or $15 apiece for their existing shares, up to $2 billion. Both bids would leave a part of Dell public, as opposed to the Silver Lake plan.

Icahn is offering $15 per share for about 58% of Dell, with himself controlling only about 24.1% of the company, and other investors, including Southeastern Asset Management and T. Rowe Price, controlling the rest of the majority stake. Icahn also said he's held preliminary talks with Blackstone and would review Blackstone's bid, which is set to expire on Thursday. Blackstone is working with buyout firm Francisco Partners.

"We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders," Alex Mandl, head of the special committee handling the company's sale, said. "We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders, whichever transaction that may be."

Michael Dell and Silver Lake can only make one more bid for the company, and would be entitled to a breakup fee of only $180 million—half the average for a deal of this size—should Dell pick another buyer.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of