The Dell XPS 13 ultrabook
(Credit: Dell)
Dell is reportedly looking to go private for a total asking price of $22 billion to $25 billion.
The company spoke with private-equity firm Silver Lake Partners about a leveraged buyout on Tuesday, the Wall Street Journal said yesterday. Citing a "personal familiar with the matter," the Journal claimed the buyout group would include Silver Lake, Dell CEO Michael Dell, and at least one other investor, such as a pension fund or a sovereign wealth fund.
To meet an asking price of $13 to $14 a share, or $22 billion to $25 billion, Silver Lake and the other investors would need to generate $2 billion in equity. Michael Dell could use his existing stock, worth around $3.6 billion, according to the Journal's source. More funds could come from cash on Dell's balance sheet and new debt of around $15 billion.
As described by the Journal, investors in an LBO raise cash for the purchase of a company mainly through debt. The amount borrowed is then repaid through money earned by the business or by selling some of the company's assets.
Like other vendors, Dell has been hit hard by the downturn in PC demand. Sales and earnings have been dropping. Once worth more than $100 billion, the total ... [Read more]
by Lance Whitney via CNET
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