Dell founder in fresh bid talks

THE FOUNDER and chief executive of Dell has made a bold bid to remain in charge of the company, no matter who wins a multi-billion dollar battle to buy the computing giant.

Michael Dell is understood to have held talks with Blackstone Group, the most serious rival to his consortium’s bid to take the PC maker private, with the view to retaining his position as chief executive should the private equity group beat his own offer, according to Bloomberg News.
Dell’s move underlines his determination to stay in command at the company he founded almost 30 years ago regardless of who completes what is set to be the biggest buyout since the financial crisis struck.
Last night, the chief executive emailed staff to reaffirm his commitment to the company, telling workers “our best days are still ahead”. He made no mention of the Blackstone bid, but outlined his ambitions to invest in the PC and tablet businesses.
Last week, a special Dell committee – set up to explore possible bids for the company ­– revealed that Blackstone proposed to make an offer that would value Dell at more than $25bn (£16.5bn). This is superior to the $24.4bn offer that Michael Dell, who has teamed up with buyout specialists Silver Lake Partners and Microsoft, tabled in February.
The original bid has been criticised by investors who claim it undervalues the firm. Dell believes he is the only person who can turn the group around in a declining PC market, and wants to reposition as an enterprise software firm in the mould of IBM.
Blackstone has reportedly been seeking someone new to take the helm, with one option being Oracle co-president Mark Hurd, a former chief executive of Dell rival Hewlett-Packard.
However, any move would be easier with the founder on board, since he owns a 15.6 per cent stake in the company, and already has the backing of financiers including Microsoft.
“Blackstone is a pragmatic company and they’ll do what makes the most sense. They realise that a deal can’t be done without Michael Dell,” said Roger Kay, an analyst at technology researcher Endpoint Technologies.
“For one thing, he has a clear vision for [the firm], and the other reason is that he has the means to make any bid that is hostile very expensive. It’s now clear that whoever is buying Dell is buying into Michael Dell’s strategy.”
Three parties – the Silver Lake and Michael Dell consortium, Blackstone, and activist investor Carl Icahn – have made proposals regarding an offer for Dell, although only the former has tabled a bid so far.
Dell, Silver Lake and Blackstone did not comment yesterday.