Dell may be close to finalizing buyout deal

Buyout speculation has customers, investors taking another look at PC maker

By , Computerworld |  IT Management, Dell

Dell reportedly is closing in on finalizing a deal to take the company private and all the speculation is shining a renewed spotlight on the PC maker, say analysts.

"The buyout speculation is helping Dell in that investors and customers are giving it a second look," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "To public investors, it's the classic wanting what they can't have. And to customers, it's a sign of confidence. It's important to get a deal wrapped up in the next few weeks, though, because that positive could turn negative if it drags out too long."

Earlier Monday, the Wall Street Journal reported that Round Dell, the world's number three PC maker, is close to finalizing a $23 billion buyout of the company.

Another report from the Bloomberg news service noted that the deal, which would include four banks, would call for Michael Dell, the company's founder and CEO, to contribute equity financing of $500 million to $1 billion. The buyout reportedly is being led by Silver Lake Management LLC, though Microsoft Corp. is rumored to be also be providing some funding.

Dell, based in Round Rock, Texas, decline comment.

Robert Enderle, an analyst with The Enderle Group, said he expects the deal to be announced this week.

"The goal is to get Dell out from under a massive amount of reporting cost and tactical financial performance oversight so they can do big deals, and are free to restructure the company if they need to," Enderle said. "If Dell pulls this off, expect other firms in this segment to take a similar course so they can restructure more effectively for the changed technology market."

For the last few years, Dell, which has been public for about 25 years, has been dealing with the struggling PC market, which has been continually hammered by the sluggish economy and the burgeoning tablet market.


Originally published on Computerworld |  Click here to read the original story.
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