Blackstone Officially Joins the Bidding for Dell Inc, Suggests Replacements for CEO Michael Dell

Michael Teague  |

Speculation over the last week that private equity firm Blackstone Group (BX) had been seriously considering an offer to purchase PC-maker Dell (DELL) was confirmed today.

Blackstone’s preliminary offer to take over the computer company rings up at $14.25 per share, which handily beats out the original proposal from the company’s founder and CEO Michael Dell and his private partner Silverlake Management.

The Blackstone bid comes on the heels of one from the legendary billionaire investor Carl Icahn, who already owns 80 million shares of the company, had offered $15 per share, potentially upping his stake in Dell to 58 percent.

The bidding war that now seems to finally be gearing up was the result of the company’s biggest stakeholder Southeastern Asset Management (8.4 percent of shares)’s displeasure with the original $13.65 offer from Michael Dell and Silverlake.  Originally, there had been some anticipation of Southeastern and Icahn working together as they did last year against almost half of Chesapeake Energy (CHK)’s board of directors, but so far the two have not joined forces over Dell.

Significant also is the fact that Blackstone has already suggested potential replacements for Michael Dell as CEO should they end up purchasing the world 3rd largest PC maker.

The company has struggled in the past few years, being overtaken by a combination of PC competitors like Lenovo and HP, but has also lagged far behind the rise of mobile and tablet devices.  All the same has had a strong 2013, up over 43 percent so far, with some of the most recent gains resulting from news about the pending sale.  Shares could gain even more as a bidding war heats up.

Dell was up 2.62 percent on Monday to close at $14.51 per share.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of 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:


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