Dell buyout deal could happen Monday -- Reuters

An agreement to take the PC maker private is close to completion, Reuters reports, and may be announced next week, with an offer of perhaps $13 to $14 a share.

The Dell XPS 13 ultrabook
The Dell XPS 13 ultrabook Dell

Dell may be close to a deal that would take the PC maker private, Reuters reported this morning.

Citing "two people familiar with the matter," the news service reported that the company could announce an agreement as early as Monday. Expectations are that Dell would be bought out by a group led by its CEO and private equity firm Silver Lake Partners.

Later in the day, Reuters published a separate report, also citing two people familiar with the matter, saying that Michael Dell and partners were negotiating with the company at a price of $13 to $14 per share. That's the same valuation given two weeks ago in a story in the Wall Street Journal.

Rumors of the impending move have swirled ever since the Wall Street Journal and Bloomberg reported on the possibility. Dell has been mum about the possibility, telling CNET that the company doesn't comment on rumor and speculation.

Assuming the speculation is credible, CEO Michael Dell could kick in equity financing of $500 million to $1 billion along with his 15.7 percent share of the company. That would give him majority ownership of the new private firm.

Silver Lake and Microsoft would become minority investors, a "third person familiar with the matter" told Reuters. Microsoft could contribute anywhere from $1 billion to $3 billion to help finance the deal, CNBC said last week. However, the Wall Street Journal reported Tuesday that Microsoft may want some say in Dell's business, which could be a sticking point in negotiations.

The various parties are reportedly hashing out the last-minute details in an attempt to close the deal this weekend. But that deadline could slip, according to Reuters' sources. The price that Dell investors would receive remains unknown, but the buyout would be one of the largest in years.

Like other PC vendors, Dell has been struggling to eke out sales in a sluggish market. The company has also seen its market share eroded by rivals such as HP, Lenovo, and Asus.

But Dell has worked hard to expand into other technology services, especially in the corporate market. Going private would give it the flexibility to ramp up that strategy without having to worry about making shareholders happy every quarter.

Update 11:07 a.m. PT: Added possible per-share price of $13 to $14 as reported in a follow-up Reuters story.

 

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