1176RA The Dell Deal: What’s The Deal?
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.