MICHAEL DELL is set to surge ahead in the battle to win control of his PC manufacturer this week, with activist investor Carl Icahn now the only rival to his $24.4bn (£16bn) bid to take the firm private.
On Friday, US private equity giant Blackstone Group pulled out of the bidding for Dell, citing concerns over the declining PC market. The withdrawal leaves Michael Dell in pole position to take control of the struggling firm, although his bid faces opposition from Icahn – a big shareholder – as well as others.
Since Dell’s board recommended the offer tabled by the 48-year-old billionaire, in tandem with Silicon Valley buyout firm Silver Lake, the bid has been criticised by leading shareholders and rival bidders who claim it undervalues the company. However, shareholders hoping for a different solution are now running out of options. Despite his investment vehicle proposing to offer $15 per share to Michael Dell’s $13.65, Icahn is yet to table a firm bid, and though big investors such as fund manager Southeastern have said they feel shortchanged, they are likely to be as wary as Blackstone about continuing to invest. One option may be an Icahn-backed battle to force Dell to hand investors its $11bn cash pile back.
Blackstone pulled out of bidding after the global PC industry saw its biggest ever fall in sales in the first three months of the year, down 14 per cent year-on-year according to research firm IDC.
Michael Dell is hoping that by turning the company he founded private, he will be able to reposition it as a more profitable software business, free from the pressures of Wall Street. After Blackstone withdrew on Friday, Dell shares fell to two-month lows of $13.40.