/// Dell’s Go-Private Case Emerged as Business Eroded

March 29, 2013  |  All Things Digital


Michael Dell negotiated for the better part of five months, in a tortured, tedious process with the board of directors of Dell Inc., the troubled computing company that bears his name, over the details of a proposed $24.4 billion buyout plan, a new proxy filing released today shows. Dell and his partner in the deal, the private equity firm Silver Lake Partners, first offered $11.22 a share for the company, and during the course of a lengthy negotiation process that included 25 separate meetings, raised its offer price six times, adding $4 billion to to the pot. The parties finally settled on $13.65 in an offer announced last month . The filing also shows that CEO Michael Dell met with representatives of private equity firms Blackstone Group and Francisco Partners, which have teamed up to make a competing offer for the company. The meetings occurred on March 7 and 8, during a 45-day go-shop period, when a special committee of Dell’s board overseeing the process sought superior offers. Blackstone, as well as the activist investor Carl Icahn, last week uncorked offers they argue are better than than the Dell-Silver Lake bid. The new disclosures are contained in a massive 274-page proxy filing with the U.S. Securities and Exchange Commission that was made public only minutes ago. Among the other new disclosures made in the filing, which you can read below: The process of going private began in earnest on June 15, 2012, when Dell’s largest shareholder, Southeastern Asset Management, which owns about 7 percent of Dell’s shares, contacted Michael Dell about the possibility. Dell said he’d think about the idea. The special committee was motivated to embrace the go-private option in part by the rapid slowdown in Dell’s various lines of business; they were not satisfied that the turnaround plan put in place by CEO Michael Dell to push the company away from personal computers and toward enterprise hardware and services was having the desired effect. As of the end of Dell’s third fiscal quarter in 2013, its revenue for each of its prior seven quarters had fallen below internal forecasts. Dell had missed numerous quarters and, except in one case, the expectations of analysts.

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Dell’s Go-Private Case Emerged as Business Eroded


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