Blackstone Group Reported to Mull Counteroffer to Michael Dell/Silverlake Buyout Proposal

Michael Teague |

Michael DellOn Tuesday, shares for the tech company Dell, Inc. (DELL) hopped 0.56 percent to $14.25 amidst speculation of a new buyout deal from Blackstone Group (BX) that would rival the current one being offered by the company’s founder and CEO Michael Dell in tandem with Silverlake Management LLC.



Dell and Silverlake have bid $13.65 per share to purchase the company and take it private.  With the deadline for rival bids coming up on March 25, the BlackstoneGroup’s bid follows on rumors of interest from competitors Hewlett Packard (HPQ) and Lenovo, both of whom lead Dell in global PC sales.

News of counterbids to the originally proposed deal comes amidst a growing backlash from the company’s largest shareholders, Southeastern Asset Management and T. Row Price, who have expressed their dissatisfaction with the $13.65 offer, saying that they think the company is worth at least $20 per share.

With the entry of famed activist investor Carl Icahn, who has just taken up a 6 percent stake in the company and immediately begun clamoring for a significantly increased dividend payout as an alternative to the buyout, into the fray, it is unclear what sort of counteroffer is forthcoming, and what it might look like.

Brian White of Topeka Capital has said that $18 is a fair buyout price for the deal, saying that Blackstone’s interest is genuine, while Sterne Agee’s Shaw Wu has cited the company’s existing high debt load as prohibitive to a substantially better deal.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BX The Blackstone Group L.P. Representing Limited Par 31.67 -0.18 -0.57 1,055,991 Trade
ECOC ECOC n/a n/a n/a 0 Trade
HPQ HP Inc. 21.24 -0.10 -0.47 9,657,949 Trade

Comments

Emerging Growth

Pressure Biosciences Inc

Pressure BioSciences Inc is a biological life sciences research company. It is engaged in the development and commercialization of a platform technology called pressure cycling technology.

Private Markets

Voleo

Voleo is a free download that allows you to form investment clubs with your friends, family, colleagues, classmates, teammates…basically anyone you know and trust. Invest and manage a stock portfolio…

The Green Organic Dutchman

The Green Organic Dutchman Ltd. ("TGOD") produces farm grown, organic cannabis for medical use. The company grows its high quality organic cannabis in small batches using craft growing, all natural…