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Dell board said to be voting on leveraged buyout

February 05, 2013|Bloomberg News

Dell Inc.'s board was expected to vote late Monday night on an offer, led by founder Michael Dell, to take the company private for about $24 billion, people with knowledge of the matter said.

The deal may be announced early Tuesday, said the people, who asked not to be identified because the process is private. The offer values Dell at $13.50 to $13.75 a share, two of the people said.

Shares of the Round Rock, Texas, personal-computer maker fell 36 cents, or 2.6%, on Monday to close at $13.27, giving it a market value of about $23 billion.

Silver Lake Management would invest more than $1 billion in the buyout, and Microsoft Corp. about $2 billion, one of the people said. The person said Chief Executive Michael Dell would contribute his 15.7% stake, valued at more than $3.6 billion, and cash, giving him the largest stake. Several banks would lend a total of $15 billion.

The company has struggled to keep pace with competitors such as Apple Inc. in mobile electronics. It also has been slow to come to terms with the shift in business demand toward cloud computing, where storage and software are delivered at low cost over the Internet.

Going private may help the third-largest PC maker speed up attempts to revive growth and compete more effectively without the scrutiny of public investors.

Spokesmen for Dell, Microsoft and Silver Lake declined to comment.

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