Dell nears buyout that could top $24 billion

Fri Feb 1, 2013 3:20pm EST
 

By Nadia Damouni and Soyoung Kim and Greg Roumeliotis

NEW YORK (Reuters) - Dell Inc 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 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, Bank of America Merrill Lynch, Credit Suisse and RBC Capital, 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 is advising Dell.

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

 
A company logo of Dell is seen on the cover of its laptop at a Dell outlet in Hong Kong October October 21, 2009. REUTERS/Bobby Yip