Dell nears buyout that could top $24 bln: sources

NEW YORK Sat Feb 2, 2013 5:27am IST

Shoppers walk past a Dell booth at the COMEX information technology and consumers technology exhibition in Singapore August 28, 2008. REUTERS/Tim Chong/Files

Shoppers walk past a Dell booth at the COMEX information technology and consumers technology exhibition in Singapore August 28, 2008.

Credit: Reuters/Tim Chong/Files

Related Topics

Stocks

   
Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

NEW YORK (Reuters) - Dell Inc DELL.O is edging closer to an agreement to sell itself to a buyout consortium led by Michael Dell, its founder and chief executive, and private equity firm Silver Lake Partners in a deal that could top $24 billion, people familiar with the matter said on Friday.

The buyout consortium is negotiating taking Dell private at $13 to $14 per share, two of the people said. This translates into an equity valuation for the Round Rock, Texas-based company of between $22.6 billion and $24.4 billion.

Dell shares were up 2.5 percent at $13.57 in afternoon trading.

Michael Dell is expected to take majority ownership of the world's third-largest personal computer maker while Silver Lake and Microsoft Corp (MSFT.O) would become minority investors, three of the people said.

The transaction is set to be finalized over the weekend and the timetable could still slip, the people cautioned, asking not to be named because the matter is not public.

The investment group, which held negotiations with Dell's camp in New York on Thursday, has secured up to $15 billion of debt financing to take Dell private from four investment banks -- Barclays (BARC.L), Bank of America Merrill Lynch (BAC.N), Credit Suisse (CSGN.VX) and RBC Capital(RY.TO), people familiar with the matter said.

Barclays is also advising Silver Lake on the transaction, along with Perella Weinberg Partners, said two of the people. JPMorgan Chase & Co (JPM.N) is advising Dell.

Representatives for Dell, Microsoft, Silver Lake and Barclays declined to comment. Perella Weinberg could not be immediately reached for comment.

As part of the transaction, Michael Dell will contribute his existing stake of almost 16 percent in the company toward gaining majority ownership, sources close to the matter have said. The deal would mark the largest leveraged buyout since the global financial crisis.

Going private would allow Dell, which has been trying to become a one-stop shop for corporate technology needs as the PC market shrinks, to conduct that difficult makeover away from public scrutiny.

Dell has formed a special committee of its independent directors and hired Evercore Partners Inc (EVR.N) to assess whether the company is getting the best deal for shareholders and not one that is just in the best interest of Michael Dell, several people familiar with the matter have told Reuters previously. (Additional reporting by Poornima Gupta in San Francisco and Bill Rigby in Seattle; Editing by Edwina Gibbs and Kenneth Barry)

FILED UNDER:

REUTERS SHOWCASE

WTO Trade Deal

WTO Trade Deal

WTO clinches first global trade deal in its history  Full Article 

Kashmir Attack

Kashmir Attack

Ten dead in Kashmir's worst militant attack in more than a year  Read 

OPEC Meeting

OPEC Meeting

Saudis block OPEC output cut, oil price sinks further.  Full Article 

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

GDP, RBI Preview

GDP, RBI Preview

GDP growth set to weaken, business wants reforms more than rate cut  Full Article | Related Story 

Jaitley to Rajan

Jaitley to Rajan

Jaitley likely to meet Rajan on Monday to urge rate cut  Full Article 

Banking Sector

Banking Sector

India moves to allow more businesses to offer basic financial services.  Full Article 

Jamini Roy

Jamini Roy

Photo Gallery – Bengali household name Jamini Roy’s paintings  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage