Dell May Go Private if Expected Historic Buyout Deal is Reached Next Week

A historic leveraged buyout involving Dell (News - Alert) – the third-largest PC maker worldwide – could take place early next week.

Given the size and wealth of the company, the buyout would become “the largest leveraged buyout since the global financial crisis,” the Business Insider reported.

News reports also predict Michael Dell would become majority owner of the company. He is leading the buyout consortium with Silver Lake Partners, according to Reuters (News - Alert).

Microsoft would be another top investor under the reported agreement, and could contribute about $2 billion for the deal.

Dell now has a market value of about $23 billion, and the deal is reported to be about $24 billion.

Some last-minute details still need to be worked out. Investors met on Thursday and meetings may continue this weekend.

The group has already gotten $15 billion in financing for the deal from Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital.

What are the reasons behind the move?

“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,” explained one report from the Business Insider.

Also, Dell has faced competition in recent years from such competitors as HP, Lenovo (News - Alert), and Asus, according to CNET. Smartphones and tablet computers have taken market share from laptop and desktop makers.

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

The price used in the possible buyout may be between $15 and $16 a share, The New York Post said. A deal could come as early as Sunday or Monday.

Evercore Partners was employed by Dell’s board to represent interests of other possible bidders, The Post added. No rivals have been named so far.

Dell has been a well-known public company for 25 years, so there is significant interest in the possible buyout. “Reports of a deal in the making have been circulating for several weeks,” according to a report carried on TMCnet.

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