Dell in talks to go private, shares surge

Mon Jan 14, 2013 8:02pm EST
 

By Nadia Damouni and Poornima Gupta

NEW YORK/SAN FRANCISCO (Reuters) - Dell Inc is in talks with private equity firms on a potential buyout, two sources familiar with the matter told Reuters, confirming reports that sent shares in the world's No. 3 PC maker soaring 13 percent to nearly a eight-month high.

The firms are now holding discussions on a deal with billionaire Chief Executive and founder Michael Dell, who owns about 14 percent of the company, according to one source with knowledge of the matter.

The Wall Street Journal cited unidentified sources as saying TPG and Silver Lake could team up on an offer, possibly in conjunction with other investors such as pension funds. JPMorgan Chase & Co was also involved in the negotiations, it added.

The first source told Reuters any potential deal could be structured as a management-led buyout with Michael Dell at the helm.

Talks had progressed for two to three months, heating up in late 2012, and a deal could be reached in six weeks, the Journal cited sources as saying.

Dell, which has steadily ceded market share to Hewlett Packard and China's Lenovo, declined to comment on what it called rumors and speculation.

The company has lost 40 percent of its value since last year's peak, and is trying to reinvent itself as a seller of higher-margin services to corporations - an internal overhaul that might be conducted away from public scrutiny.

Some analysts say taking the company private, an idea that has surfaced sporadically in past years, makes sense.   Continued...

 
A man wipes the logo of the Dell IT firm at the CeBIT exhibition centre in Hannover February 28, 2010. REUTERS/Thomas Peter