Dell computers to be bought back by founder Michael Dell

6 February 2013 10:44 am - 2 - {{hitsCtrl.values.hits}}

A A A

Michael Dell has said he will buy back the world's number three PC-maker that he founded and that carries his name.

Along with technology investor Silver Lake, and with financial backing from Microsoft, he will offer to buy the firm for $24.4bn (£15.5bn).

The move will take Dell off the Nasdaq stock exchange after 25 years.

Mr Dell hopes to turn the tide for a firm that has struggled to compete with cheap Asian rivals and the boom in smartphones and tablet computers.

Dell's success over the last 29 years has made its founder one of the richest men in America.

The chief executive and chairman already owns about 14% of the firm. He and fellow senior executives will retain their existing stakes.

The buy-out of the remaining shares will be carried out by a consortium made up of Mr Dell himself, his own investment fund, and Silver Lake. It will be financed by loans from four banks, and by a $2bn loan from Microsoft.
Buying time

Analysts said the move would give Mr Dell greater flexibility in turning the company around, by dispensing with the need to deliver strong results every quarter to shareholders on the stock market.

The entrepreneur said that the firm's long-term strategy would "still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision".

"One of the key questions is going to be how much influence Microsoft is going to have over Dell's strategy," said Cindy Shaw, analyst at Discern Group.

Microsoft provides the Windows operating systems for Dell's computers, as well as for rival PC makers such as Hewlett Packard.

Michael Dell founded the company - originally named "PCs Limited" - in 1984 at the age of 19, operating out of his dorm room at the University of Texas.

He later dropped out of university in order to develop his PCs, including innovative laptops, and to expand his business overseas.

But over the last decade, Dell has faced increasingly steep competition, from cheaper Asian PC manufacturers such as China's Lenovo, and from innovative rivals such as Apple and Samsung whose tablets and smartphones have superseded the desktop and laptop.

'Streak'

The company appeared to lose its direction between 2004-07, when Mr Dell stepped down from day-to-day management of the company, and has suffered a number of false starts since his return, including the unsuccessful launch of its "Streak" tablet computer in 2010.

Mr Dell first approached the board with a buy-out proposal in August, and news of the talks emerged in mid-January, propelling the company's share price higher.

Together with Silver Lake, he is offering shareholders $13.65 in cash per share.

Dell's share price jumped a relatively modest 14 cents to $13.41 on Tuesday on Wall Street - reflecting the fact that the news was already well anticipated by the market.

The company's board pointed out the offer represented a 25% premium over Dell's share price in mid-January when rumours of the deal first broke.

However, the share price still remains some way below the $17-$18 level it was trading at a year ago, and well below its all-time high of just under $60 in 2000.

Completion of the buy-out, which will require shareholder approval, is far from agreed.

Before completing the deal, Dell's board said it will conduct what it called a "go shop" period of 45 days during which it would actively seek competing offers to buy the firm at a better price.

(Source : BBC)

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 2

citizen Tuesday, 12 February 2013 12:00 AM

why sell it in the first place via DM Android App

your answer Friday, 15 February 2013 12:00 AM

cuz he's retarted via DM Android App

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Dell computers to be bought back by founder Michael Dell

Comments - 2

Add comment

RECOMMENDED

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Western purple-faced langurs see blue!

Most Viewed in News

Former MP Palitha Thewarapperuma dies from electrocution

Sri Lankan among NASA’s new crew for next simulated Mars journey

Ranil Wickremesinghe caravan moves on despite barking dogs

Racing event tragedy leaves seven dead including eight-year-old child

New Visa procedure implemented

Two racing drivers arrested over Fox Hill tragedy

MIRROR CRICKET

Athapaththu back atop ICC Women’s ODI Batting Rankings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings

TODAY'S HEADLINES

United States and SL Navy collaborate in CARAT 2024 exercise in Trincomalee

Upcountry estate workers stage a token strike

People have already selected Ranil for Presidency: Prasanna

Construction work for India-funded 10,000 housing units commenced

Sri Lanka secures third spot in South Asian Kurash Championship 2024

Athapaththu back atop ICC Women’s ODI Batting Rankings

Army forms committee to probe Diyatalawa Fox Hill Supercross accident

Indian cricket manager indicted for Legend Cricket League match-fixing allegations