Dell buyout talks advance, Silver Lake lines up banks

Tue Jan 15, 2013 5:28pm EST
 
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By Nadia Damouni and Poornima Gupta

NEW YORK/SAN FRANCISCO (Reuters) - Talks to take Dell Inc private are at an advanced stage with at least four major banks lined up to provide financing, two sources with knowledge of the matter told Reuters, propelling shares of the No. 3 computer maker 7 percent higher.

Buyout firm Silver Lake Partners, which is leading the deal, tapped Credit Suisse, Bank of America Merrill Lynch, Barclays and RBC late last year to finance a potential deal, the sources said on condition of anonymity, because details have not been made public.

JPMorgan is advising Dell on a potential buyout of the $19 billion company, which would be one of the largest deals since the global recession. It will also 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.

(See graphic: link.reuters.com/feh35t)

Silver Lake is working with one of its major investors, known as limited partners, the sources said. Its involvement was earlier reported by the Wall Street Journal.

The sources cautioned that a deal could come soon but that the situation was still fluid.

Dell, Bank of America, RBC, Barclays and Credit Suisse declined to comment. JP Morgan and Silver Lake did not immediately return calls seeking comment.

Dell, which has been in talks with private equity firms on a potential buyout, has had on and off discussions with the firms but talks heated up late last year, they said.   Continued...

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