Blackstone and Icahn bids make Dell rethink offer

COMPUTING giant Dell said that its founder may team up with a third party in his bid to buy the company after private equity firm Blackstone and serial entrepreneur Carl Icahn tabled alternative offers.

Michael Dell and private equity fund Silver Lake Partners made a $24.4 billion (£16.1bn) offer for Dell at $13.65 a share, but Icahn has now offered $15 a share for a 58 per cent stake, while Blackstone proposed paying more than $14.25 a share.

Icahn raised the prospect of working with Blackstone, saying the two groups had held preliminary talks.

“We plan to review the Blackstone proposal in greater detail,” said Icahn, adding the Michael Dell-Silver Lake proposal “significantly undervalues Dell”.

One issue for Dell’s special committee – which is considering the offers – is how to compare the proposals. Blackstone’s and Icahn’s proposals envision that a portion of Dell’s stock will remain publicly traded.

Southeastern Asset Management, the company’s largest shareholder after Michael Dell and a staunch opponent of the founder’s buyout offer, said it was pleased that the two new bids were structured in such a way that shareholders could remain invested in the company.

Wells Fargo Securities analyst Maynard Um said: “We continue to believe a higher bid than the current $13.65 a share offer will likely be offered but, based on our assumptions, a $15 a share bid may be a threshold. A higher Silver Lake-Dell bid might still be a more attractive option.”