DELL has confirmed that new bidders have entered the battle for the PC manufacturer, and that both intend to offer more than company founder and chief executive Michael Dell’s original $24.4bn (£16bn) bid.
However, Michael Dell stated his intention to continue to hold on to power at the US firm, saying he was prepared to work with the rival offers from Blackstone Group and Carl Icahn.
A special bid committee, set up to explore better offers in the wake of Michael Dell’s offer, said yesterday that both rivals proposed to beat his $13.65 a share bid. Blackstone is offering at least $14.25 per share, while Icahn said his investment vehicle would pay $15 a share for 58 per cent of the company.
Further bidding could push the value of a deal above $27bn, easily the biggest leveraged buyout since the financial crisis struck.
The committee said it would evaluate the other two proposals before recommending an offer to shareholders. It added that Michael Dell – who is expected to return with a new bid – would have four days’ notice to improve on that recommendation.
The possibility of Michael Dell and Blackstone working together on a deal also surfaced yesterday, after the committee said the firm’s founder “has confirmed to the committee his willingness to explore in good faith the possibility of working with third parties regarding alternative acquisition proposals”.
Blackstone’s offer expires on Thursday, meaning that more developments are expected this week.
Dell’s board recommended an offer from Michael Dell and buyout firm Silver Lake Partners in February, but since then the bid has been criticised by big investors for undervaluing the business. The company’s share price has remained above Michael Dell’s offer since mid-February in anticipation of a better deal, and rose 2.6 per cent to $14.51 yesterday.
Michael Dell, who founded the company while at university in 1984, hopes to take the company private in order to turn it from a company focused on selling software rather than hardware without interference from Wall Street.