Posted March 28, 2013 by Jeremy white in Business

Michael Dell likely to better his bid to keep control of his brainchild

Michael Dell likely to better his bid to keep control of his brainchild
Michael Dell likely to better his bid to keep control of his brainchild

Michael Dell, the founder and Chief Executive Officer of Dell Inc. is likely to make a better bid in his quest for wholly buying out the company. His offered price for the company has been challenged by bids from Blackstone Group LP and billionaire Carl Icahn.

Michael Dell, together with Silver Lake Management LLC offered a price of $24.4 billion for the PC making company. However, Blackstone and Icahn have responded with higher offers than this. The two challenges were not expected at the time Dell placed his initial bid for the company, and he will have to hurriedly put together a plan to meet them now.

Michael Dell had founded the company in his Texas dorm room in the year 1984, and it is the third-largest PC manufacturer in the world today. Of late, it has been struggling and facing much competition from brands which have emerged in the computer systems industry.

Michael Dell wants to bring about large scale changes in the company. The PC market is not as lucrative as it used to be, which is why he plans to expand operations and make Dell a prominent name when it comes to tablets and cloud computing.

Any counterbid on the part of Dell and Silver Lake has to be determined and decisive, as there will be only one chance for them to trump the tentative offers of Blackstone and Icahn. Blackstone, which happens to be the world’s biggest private-equity firm, has offered a price for the company that is is excess of $14.25 per share. It is working in collaboration with Morgan Stanley, and the two seem confident that enough funds can be raised to see the deal through. Icahn has offered to pay $15 in cash for a 58 percent share in the stock of the company, a source was quoted as saying.

The original merger document which was drawn up for Silver Lake LLC on February 5 includes terms to the effect that after a preliminary look at the bid, the Board at Dell will devote time to investigating the counter offers, if any. The competing bidders will then have to show that they can pay the amount they bid by getting support from those who commit to help them financially. In the scenario of the Board accepting a counter offer, Michael Dell and Silver Lake are to be notified of the same, and given a time period of four days to make a better deal and get things back in their favour.

Meanwhile, there has been no official statement made in the matter. David Frank, Dell spokesman decline to comment, as did a spokeswoman for Blackstone. No news was forthcoming from Icahn and Morgan Stanley, either.

Jeremy white

Jeremy white graduated from the University of Dayton with majors in political science and journalism. Jeremy is our politics and economic policy reporter. Jeremy has also written numerous feature stories for Roll Call and contributed foreign policy pieces, Jeremy has covered nine political conventions, Congress, the White House, the Pentagon and the FCC.