RUMOR: Michael Dell Wants A Majority Control Of The Company

Posted Jan 30, 2013

Dell founder Michael Dell is seeking a buyout of the PC manufacturing company that he founded in 1984.  Rumor has it that he would combine his 15.7% stake with along with $1 billion of his personal funds.  Michael Dell would be contributing around $500 – $1 billion in equity financing according to sources with Bloomberg.

Silver Lake Management and Microsoft Corporation may also be a part of buying out part of the company to take it private.  By owning over 50% of the company, Michael Dell believes he could reposition the company as it deals with shrinking PC sales and the market is heavily focusing on cloud computing and mobile devices.

Michael Dell’s stake in the company is worth around $3.6 billion at the 15.7% ownership.  By contributing that amount along with another $500 million to $1 billion, Michael Dell would be able to put up over half the total $8-$9 billion equity check.  The remainder of the takeover would be financed by Silver Lake and Microsoft.  Silver Lake and Microsoft would put in around $1 to $2 billion each.

Michael Dell is treading cautiously since making the company he founded private could be a conflict.  Evercore Partners is advising the special committee of Dell’s board.  Evercore also approached other potential buyers, but has not seen any alternative bids as of yet.

Bloomberg reported that Silver Lake and their partners have lined up about $15 billion in funds to buyout Dell.  This deal would value Dell at around $23 to $24 billion.