1176RA The Dell Deal: What’s The Deal? Popular
Authors: Bruce Guptill, Mike West, Alex Bakker and Bill McNee
After weeks of marketplace speculation, Dell Inc. has formally announced its intention to buy back its outstanding shares and privatize the company for approximately $24.4B. The move will take Dell off the NASDAQ stock exchange after more than 25 years of trading. The buy-out of the remaining shares will be executed by a consortium made up of CEO Michael Dell, his own investment fund, and Silver Lake Partners. The leveraged deal will be financed by loans from four banks, and by a $2B loan from Microsoft Corp. Michael Dell owns about 14 percent of the firm’s shares; he and other senior executives will retain their existing shares.
Saugatuck believes that Dell (the company) wants to, and needs to, coalesce itself into a Cloud-oriented services provider, and that remaining publicly-traded inhibits the company’s ability to accomplish this core change in a short enough time period to survive.