Dell's board evaluates rival bids: source

Sun Mar 24, 2013 5:39pm EDT
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By Jessica Toonkel and Paritosh Bansal

(Reuters) - A special committee of Dell Inc's board is evaluating separate takeover proposals from Blackstone Group and billionaire investor Carl Icahn to decide whether either or both are likely to trump an existing $24.4 billion take-private deal, a source familiar with the discussions said on Sunday.

Icahn and Blackstone put in preliminary bids late last week, potentially upsetting the plans of the No. 3 PC maker's founder, Michael Dell, and private equity firm Silver Lake to take Dell private.

Dell could make an announcement as soon as Monday about whether either of the rival offers were reasonably likely to lead to a superior bid, the source familiar with the matter said. But the source warned that the special committee of the board may also decide to take longer to reach a decision.

Blackstone declined to comment. Dell and Icahn could not be immediately reached for comment.

The unexpected rival bids for Dell throw the future of the PC-maker into question. A "go-shop" period - during which the target company actively looks for rival offers - for a deal of this size rarely evokes competing offers. The bids now could potentially turn the sale of Dell into a three-horse race, which could drag out for months.

It also could threaten the future of Michael Dell, who founded the technology giant at the age of 19 with just $1,000. Under the Silver Lake plan, he planned to contribute his roughly 16 percent share of Dell's equity to the deal, along with cash from his investment firm MSD Capital, and to remain CEO of the company.

Under Silver Lake and Michael Dell's offer, Dell would be taken private for $13.65 per share. Silver Lake is putting up $1.4 billion in the deal.

But that plan has come under attack from several high-profile Dell shareholders such as Southeastern Asset Management and T. Rowe Price. The shareholders have said that his offer undervalues the company and pledged to vote against the deal, which requires a majority of shareholders, excluding the founder, to pass.   Continued...

Michael Dell Chairman and CEO of Dell Inc. arrives at the launch event of Windows 8 operating system in New York, October 25, 2012. REUTERS/Lucas Jackson