Dell boosts company buyout offer

August 5, 2013 // 8:31 a.m.

Tags: #dell #dell-buyout #financial #michael-dell #microsoft #pc-market #post-pc-era #silver-lake

Michael Dell's bid to take his company private may go ahead after all, following a renegotiation which sees the value of the company's stock boosted to around $24.9 billion.

Dell's buyout bid was announced back in Feburary when the company founder confirmed rumours that an investment group - which includes cash from Windows creator Microsoft - had put together a bid to purchase the company's public stock and take it private for the first time since its initial public offering in 1992.

The move came as the global PC market continued to shrink and Dell's financial outlook worsened, but the company's investors believed the buyout hid a plan by Dell and his partners to bring the company back to growth - which would result in the bought-out investors missing out on a potentially substantial pay-day.

As a result, Dell saw considerable resistance from groups of shareholders opposed to the deal which saw the company valued at $24.4 billion - despite this representing a considerable premium on the company's $21.35 billion market capitalisation. At the time, Dell claimed that the offer would not be increased.

That's something his investment group has U-turned on, however, with the announcement that the buyout offer has now been increased from $24.4 billion to $24.9 billion - representing a ten-cent boost per share, and providing for a special dividend of $0.13 per share at or before closing along with guarantees regarding a $0.08 per share dividend.

'The Committee is pleased to have negotiated this transaction, which provides as much as $470 million of increased value, including the next quarterly dividend that will now be paid regardless of when the transaction closes,' claimed Alex Mandl, chair of the Dell Special Committee negotiating the buyout with the investment group.

The company's shareholders will vote on the revised offer next month, with initial indications suggesting that the founder will receive the majority approval he requires in order to seal the deal.

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