New offers emerge for Dell’s purchase
NEW YORK - Agence France-Presse
CEO Michael Dell reacts to a question during a news conference in Beijing. AP photoA bidding war has broken out for U.S. computer maker Dell as two new acquisition offers emerged in competition with the private buyout led by founder Michael Dell.
The company said March 25 that the offers were from billionaire corporate raider Carl Icahn and investment fund Blackstone Group.
Both offers “could reasonably be expected to result in superior proposals,” but further study is needed, Dell said in a statement.
Dell said its special committee, which had set March 29 deadline, would continue negotiations on both offers.
“We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders,” said special committee chairman Alex Mandl.
“We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders.” The new offers suggest Dell could bring a higher value than the $24.4 billion proposed in the initial buyout offer, analysts said.
The initial offer amounted to $13.65 per share, but Brian White at Topeka Capital Management said bids could go considerably higher.
“With three forces at work, we believe a higher buyout bid is in the cards and we continue to believe that an $18 (per share) buyout price for Dell makes sense; however, it is unlikely that this price level will occur in the first round of bidding,” White said in a note to clients.
Roger Kay, an analyst with Endpoint Technologies, said the new bids suggest Dell and other firms may have been unfairly punished by the stock market, amid gloomy predictions about a shift away from traditional computers.
In February, the company unveiled plans to go private in a buyout led by founder Dell, backed by equity investment firm Silver Lake and a loan from Microsoft.