Dell buyout could be impeded by possible Blackstone bid

Word has it that the asset management firm may be considering outbidding Silver Lake in the buyout that aims to take the PC maker private.

The Dell XPS 13 ultrabook. Dell

Blackstone is reportedly looking to get its hands on Dell before the Silver Lake and Michael Dell $24.4 billion buyout is complete.

According to Bloomberg, the asset management firm is supposedly considering a bid that could out-do what Silver Lake offered for the Dell acquisition. People familiar with the matter told Bloomberg that Blackstone has not yet made a decision and that it may bid as part of a group of investors. Reportedly, Blackstone has already reviewed Dell's finances after signing a non-disclosure agreement.

Dell announced in February that it had plans to take the company private via a $24.4 billion, or $13.65 per share, buyout by its founder and CEO Michael Dell, who owns about 14 percent of Dell's common shares, and the private equity firm Silver Lake. Microsoft also kicked in a $2 billion loan.

Under the Silver Lake merger agreement, Dell's board can look for a better proposal up through March 22. If a person or company makes a successful competing bid during this "go-shop" period, that person or group will be subject to a $180 million termination fee.

Other companies have also reportedly reviewed Dell's finances after signing non-disclosure agreements, including Hewlett-Packard and Lenovo, according to Bloomberg. If another firm outbids Silver Lake and is able to proceed with a buyout, it's unclear if Dell will stay public or continue on its course to go private.

Among those who think it's a mistake for Dell to go private is activist investor Carl Icahn. Apparently, Icahn has been building a 6 percent stake in Dell and is urging the company to pursue leveraged recapitalization instead of the proposed Silver Lake buyout. Last week, Icahn entered into an agreement with Dell that allowed for him to review of the company's confidential information .

The Silver Lake buyout has to get approval from a majority of Dell's shareholders in order to go through. If the deal is successful, it will be the largest technology leveraged buyout since the financial crisis hit in 2008.

CNET contacted Blackstone and Dell for comment. We'll update the story when we get more information.

 

Join the discussion

Conversation powered by Livefyre

Don't Miss
Hot Products
Trending on CNET

HOT ON CNET

Get a chance to win* a trip to IFA 2014

Share a photo of a unique way you use your phone for a chance to win a trip to IFA 2014 in Germany.