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Company Announcement

Computer Giant Dell Buyout at $24.4 Billion

6 Feb, 2013


February 6, 2013 - Dell said it has agreed to be taken private by a group led by founder Michael Dell, in a deal valuing the computer giant at $24.4 billion.

The deal "immediately delivers value to shareholders," Brian Gladden, Dell's chief financial officer, said on Tuesday in a brief interview. While Dell had made progress in turning itself around, "we do recognize that it will take more time" and is better achieved without the scrutiny and limitations of being a publicly traded company, Mr. Gladden said.

Sanford C. Bernstein analysts wrote that the "majority of shareholders appear likely to approve" the deal, citing an estimate that the top 25 holders, after Mr. Dell, control 42% of shares.

Dell said the deal requires approval by a majority of shares outstanding, excluding those owned by management and directors. It expects the deal to close by the end of its second quarter.

Analysts at ISI Group, an investment research firm, said on Tuesday that the deal's price may be "perceived as cheap" and that "the deal could face some shareholder resistance at any price under $15 a share." But the analysts also said the deal makes sense for Dell and added they see no other bidders emerging in the next 45 days. 

Less than two hours after the deal was announced, rival Hewlett-Packard Co. was quick to criticize the takeover, saying the buyout would add uncertainty for customers and limit Dell's ability to invest in new products. Dell will continue to be based in Round Rock, Texas. The deal is expected to close in the second quarter of Dell's 2014 fiscal year.




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