Blackstone, Icahn to make offers to buy Dell -- reports

Asset-management firm submitted preliminary deal proposal last night, to rival Michael Dell and Silver Lake's $24.4 billion offer, reports say. Additional report says activist investor Carl Icahn has also told Dell's board he'll make an offer.

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Edward Moyer

March 23, 2013 10:02 a.m. PT

2 min read

Asset-management firm Blackstone Group has reportedly submitted a tentative offer to buy Dell, rivaling a $24.4 billion offer from founder Michael Dell and investment firm Silver Lake, which was announced last month.

Both Bloomberg and The New York Times are citing unnamed insiders in reporting the preliminary deal proposal, which, Bloomberg said, will commit Blackstone to hold takeover discussions with Dell. The letter was reportedly sent last night, and, Bloomberg said, Dell has till Tuesday to respond.

Details of the proposal were not available, and it's not known if Dell will go along. Bloomberg said Blackstone wouldn't comment.

Bloomberg reported on Monday that Blackstone was considering a bid and that it had already reviewed Dell's finances after signing a nondisclosure agreement.

Under the Silver Lake merger agreement, Dell's board had until yesterday to look for a better proposal. If a person or company made a successful competing bid during this "go-shop" period, that person or group would have to pay Michael Dell and Silver Lake a $180 million termination fee. The fee now jumps to $450 million for any successful bidder who crops up.

Former Hewlett-Packard CEO Mark Hurd, who resigned from HP over a scandal involving a female colleague, is reportedly one of Blackstone's top candidates to lead Dell.

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 private equity firm Silver Lake. Microsoft also kicked in a $2 billion loan.

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

Update, 10:23 a.m. PT: The Wall Street Journal is reporting that activist investor Carl Icahn also let Dell's board know that he's working on a bid for the company. Blackstone and Icahn, the Journal said, "each notified a special committee of Dell's board that they are working on firm bids for the computer maker, which will afford them four more days to put together offers." Dell declined to comment, the Journal said. Icahn entered into an agreement with Dell on March 11 that gave him access to Dell's confidential information.