Bidding war for Dell as new offers emerge

Written By Unknown on Senin, 25 Maret 2013 | 22.33

A BIDDING war has broken out for US computer maker Dell as two new acquisition offers emerged in competition with the private buyout led by founder Michael Dell.

The company said the offers were from billionaire corporate raider Carl Icahn and investment fund Blackstone Group.

Both proposals "could reasonably be expected to result in superior proposals", but further study is needed, Dell said in a statement on Monday.

Dell said its special committee, which had set a Friday deadline, would continue negotiations on both offers.

"We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders," said special committee chairman Alex Mandl.

"We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders."

The new offers suggest Dell could bring a higher value that the $US24.4 billion ($A23.5 billion) proposed in the initial buyout offer, analysts said.

The initial offer amounted to $US13.65 per share, but Brian White at Topeka Capital Management said bids could go considerably higher.

"With three forces at work, we believe a higher buyout bid is in the cards and we continue to believe that an $US18 (per share) buyout price for Dell makes sense; however, it is unlikely that this price level will occur in the first round of bidding," White said in a note to clients.

In February, the company unveiled plans to go private in a private equity buyout led by founder Dell, backed by equity investment firm Silver Lake and a loan from Microsoft.

According to the details released Monday, Blackstone proposed a "leveraged recapitalisation" which would offer existing shareholders $US14.25 per share but allow those who want to hold onto the shares to be able to do so.

Under the deal, shares would remain publicly traded on the Nasdaq.

The Icahn offer would inject an additional $US5 billion into Dell, paying $US15 per share, allowing the company to remain publicly traded but under new control.

The existing shareholders would have their shares rolled over into a new company, with Icahn controlling 24.1 per cent, Southeastern Asset Management 16.6 per cent and T Rowe Price 9.3 per cent. The two investment firms had opposed the initial buyout offer.


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