Dell Buyout Talks on Track, Likely to Finish Soon (DELL)

NASDAQ: DELL) was nearing to make itself private as people involved in the deal, continued negotiating over the weekend.

The report said that shareholders might be offered approximately $13 to $14 a share; however, the negotiations over the final price were still on until Sunday, the sources said.

Shares have climbed nearly 3% to $13.63 as of Friday, boosting Company’s market valuation to nearly $23.7 billion ever since the news emerged that PC maker was closing on to sell itself to a private consortium led by founder and Chief Executive Michele Dell and private equity firm Silver Lake Partners  and Microsoft Corp. (NASDAQ: MSFT). While Dell will become the majority stakeholder (he currently hold 16% stake), Silver Lake and Microsoft will be minority stakeholders.

If the deal materializes then it will be the largest leveraged buyout (LBO) since the financial crisis.

The Round Rock, Texas-based Company, which once had a market capitalization in excess of $100 billion and was the leading player in the PC market, saw its fortune eroded as it struggled to sale PCs and laptops in the backdrop of proliferation of smartphones and tablets usage.

The WSJ report said that, the talks continued to progress among all concerned parties as of Sunday, which was in line with expectations. The Consortium has secured debt financing of $15 billion from four investment banks—Bank of America, Barclays, Credit Suisse and RBC Capital.

For private equity firms’ executives and debt investors this deal assumes lots of significance as it will help them to gauge investors’ appetite for colossal buyout deals and private equity firms’ enthusiasm to pursue them.

Thus far, the biggest LBO was made by a consortium led by the Blackstone Group. The group bought Freescale Semiconductor in deal estimated at $17.6 billion.

More Posts by this author

• Ester Lauder’s Q2 Profits Soar 13%, Boosts Full-Year Earnings Guidance (EL)
• Stocks Extend Gains, European Equities End Higher
• Forex Market Update: Euro Bounces Back
• Stocks Edge Higher in Early Trading
• Liberty Global in Acquisition Talks with Virgin Media (LBTYA, VMED)
• BP Shares Gain as Q4 Profit Beats Beat Street Estimates (BP)
• Edwards Lifesciences Shares Gain after Company Reports Q4 Results (EW)

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.