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.

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Companies

Symbol Name Price Change % Volume
BX The Blackstone Group L.P. Representing Limited Par 29.58 0.27 0.92 3,715,882
ECOC ECOC n/a n/a n/a 0
HPQ HP Inc. 14.73 -0.13 -0.87 14,687,037

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