Tuesday 5 February 2013

Dell going private in a $24 billion deal helped by a loan from Microsoft and Silver Lake!

    Dell today announced that their founder, Chairman, and CEO, Michael Dell, will definitely be buying the whole of the world's third biggest computer manufacturer! The deal will cost him a cool $24.4billion and will be supervised by Silver Lake (the same company who helped Microsoft buy Skype). Microsoft's involvement will be in the form of a $2 billion loan to Dell.

   Dell's press release explained how the processed worked:
 "The Dell Board of Directors acting on the recommendation of a special committee of independent directors unanimously approved a merger agreement under which Michael Dell and Silver Lake Partners will acquire Dell and take the company private subject to a number of conditions, including a vote of the unaffiliated stockholders. Mr. Dell recused himself from all Board discussions and from the Board vote regarding the transaction."
   The exact terms of the deal have all been worked out and if you're a shareholder then this is the bit for you. Mr Dell will offer up $13.65 per share, this is a healthy 25 percent above the price of Dell shares at the close of play on January 11th, when the shares were valued at $10.88!

   Mr. Dell hopes that this acquisition will leave Dell in a better position to compete in the future and with that stake from Microsoft there too then hopefully the pair can work together and with a bit of luck both this deal and the Google and Microsoft situation will yield some interesting results! Mr. Dell said that:
 “I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision. I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.”

   The reality is that most of us won't even notice a difference and Dell will continue to crank out their Inspiron laptops which we see in homes around the country and everything will go on as normal.

   Incidentally, The Verge have a very interesting take on how Microsoft's involvement in this deal is a move which will help them protect their business. The article is well worth a read and you can check it out here!

Dell Via Hothardware and TheVerge.


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