updated 10:37 pm EST, Fri February 1, 2013
Finalization expected over the weekend
Dell has reportedly moved forward with negotiations to go private, with a finalized deal expected as early as this weekend, unnamed sources have told Reuters. A buyout consortium headed by CEO Michael Dell and private equity firm Silver Lake Partners is said to be preparing to pay $13 to $14 per share, which would result in a maximum buyout price of approximately $24.4 billion.
The valuation estimate falls in line with separate reports that pointed to a purchase price target between $22 billion and $25 billion. Michael Dell, already the largest shareholder with a $3.6 billion stake, is expected to contribute additional capital to secure majority ownership in the privatized company, while Microsoft is rumored to be considering a $1 billion to $3 billion contribution for minority ownership.
Michael Dell's existing ownership in the publicly traded company has been viewed as a potential conflict of interest, however sources claim the company has formed a committee of independent directors and enlisted the help of advisory firm Evercore Partners to ensure that the final deal is in the best interest of the shareholders.
The privatization move is expected to enable the company to make significant changes to its business structure without encountering conflicts with shareholders. The company's consumer PC division has struggled to maintain revenues amid falling market share, though an increase in focus on enterprise products has proved profitable.
Despite the alleged certainty surrounding the leveraged buyout, Reuters' sources left open the possibility of last-minute delays as the involved parties work out the final details.