Dell tries to save private equity market
Michael Dell has found himself under enormous pressure to raise the value of his shares, and he has been open in the past to taking the company public.
Given that he owns more than 15 percent of the company, you have to take the rumors that he will take the company private seriously. It strikes me as a trial balloon. Dell has apparently opened talks with private equity firms Silver Lake and TPG about a transaction that would get the year off to a fabulous start for the private equity industry.
"Based on Dell's market value as of Jan. 11, a deal could be at least the largest buyout of a technology company since 2007, when KKR & Co. bought First Data Corp. for more than $25 billion, according to data compiled by Bloomberg. It could also be the largest acquisition in the computer industry since Hewlett-Packard bought Compaq Computer Corp. for about $19 billion in 2002, the data show," notes Bloomberg.
All computer makers rallied on the news. The notion that Dell would consider a leveraged buyout has undergirded the stock for a while now. For some, it has been the single best reason to own the stock. The big question is whether the firms could get a deal that could be valued at more than $20 billion actually consummated. That's not a given right now. Fortune suggests that it may take three firms, at least.
- here's the article