Flashes from Bloomberg:
*DELL IS SAID TO BE IN TALKS TO GO PRIVATE
*BANKS SAID TO HAVE BEEN CONTACTED ABOUT FINANCING DELL LBO
*DELL LBO TALKS MAY NOT LEAD TO A DEAL
*DELL SAID TO BE TALKING TO AT LEAST TWO PRIVATE-EQUITY FIRMS
This is a
$20bn $22bn company. Dell shares were up 10 per cent as we went to pixel.
Update (1940 UK time) – The full Bloomberg story is up, citing “two people with knowledge of the matter”, and the usual suspects are blamed for the apparent interest in going private: the death of the PC market, and the rise of tablets. It’s worth looking at fourth-quarter PC shipment data released by Gartner on Monday to scent the smell of death here, especially for Dell:
OK well, making a LBO easier might be Michael Dell’s 15 per cent stake and Dell’s cash balance. Bloomberg quotes $5.5bn net cash here. But looking at the company’s latest 10-Q we counted just over $2bn, net — $11bn cash and cash equivalents and $9bn in short-term and long-term debt.
The 10-Q also suggests Dell’s servers and networking business might be one ray of light for buyers:
If a buyout really is on the cards and it does go ahead – Dell offered no comment on the story on Monday – it would blow last year’s biggest LBO out of the water: a $7.1bn Apollo-led consortium bid for El Paso oil and natural gas assets.
Actually, scratch that — if completed, at $20bn Dell would be the biggest LBO since 2007 by an easy distance. No buyout bigger than $10bn has been done since then.