Dell reportedly in talks to take company private
Struggling PC maker Dell is reportedly in talks with at least two private-equity firms to take the company private.
Dell's alleged talks were first reported on Monday by Bloomberg, which cited two unnamed people familiar with the matter. Shares of the company surged more than 12 percent in afternoon trading in response to the report.
Though Dell is reportedly exploring the option of going private, the move is not a done deal. The talks are said to be "preliminary," and may fall apart.
While the PC market continues to struggle, Dell has a net cash balance of $5.15 billion, giving it an opportunity for a leveraged buyout.
The latest data from Gartner forecast Dell's U.S. PC shipments to have dropped 16.5 percent in the holiday quarter that concluded 2012. Those losses came despite the recent launch of Microsoft's new Windows 8 operating system.
Beyond Dell, the larger PC market has also struggled in recent years. Those woes are partially attributed to Apple's iPad, which dominates the tablet market.
In fact, this year tablet shipments are expected to surpass those of notebook PCs. NPD DisplaySearch expects that 240 million tablets will be shipped in 2013, compared to 207 million notebooks.
01-14-2013 07:42 PM
Dell’s bold plan to reinvent itself: A usb-sized pc that gives access to windows, mac
Be honest: When was the last time you felt excited about Dell? If the answer is “never,” then you might understand why the company is now in talks to go private — basically, it needs a space to boldly reinvent itself that’s far away from the relentless quarterly demands of investors. And what might that bold reinvention entail? According to Christopher Mims at Quartz, it could be a computer the size of a USB stick that’s capable of giving users access to every major operating system.
As Mims writes, Dell is working on a projected currently called “Ophelia” that is “a complete, self-contained PC” that also happens to be as big as a USB thumb drive. But the killer feature of Ophelia is that it uses “virtual instances of… operating systems running in the cloud” to give users access to “Windows, Mac OS, Google’s Chrome OS, Dell’s custom cloud solutions, Citrix cloud software, and even Google’s Chrome OS.” Let’s take a step back and think about what this really means. If you plug Ophelia into a flat-panel television, it will connect to the nearest Wi-Fi network and give you access to any type of operating system or app that is running virtually somewhere in the cloud.
In this way, Dell wouldn’t be competing with Microsoft or Apple, but with Google and its Chromebook computers that similarly deliver applications and data through the cloud rather than through hard drive storage. The difference is, while Google’s computers are thinly-veiled attempts to move users away from Windows-based applications and toward Google Apps, Dell’s Ophelia would give users a wide choice of cloud-based apps from several different providers. Or as Mims puts it, Ophelia is more of a “PC-as-parasite, a device that offloads most tasks to servers in the cloud so that the user is left with barely a token, a nearly ephemeral, solid-state key connecting to their could-based ‘computer,’ wherever they are.”
And the most intriguing part about Ophelia? Tarkan Maner, Dell’s vice president of cloud operations, tells Quartz that he wants to price it at just $50. Needless to say, this is certainly a project to keep an eye on for the future, even though it still looks like it could be a long way from becoming a reality.
Dell said to be considering buyout at $13 or $14 a share
Shares of Dell jumped more than 12% earlier this week following reports that the company was in talks to go private. The talks are now said to be more advanced than previously thought. Private equity firm Silver Lake Partners is reportedly interested in buying Dell at $13 or $14 a share, The Wall Street Journal reported, valuing the company between $22 billion and $25 billion.
In addition to the private equity firm, the buyout group would include at least one other investor such as a pension or sovereign wealth fund, along with founder and CEO Michael Dell. Reuters also reported on Wednesday that at least four major banks have lined up to provide financing for the potential deal.
Analysts believe that by going private, Dell could increase its focus on its business customers and less on consumer sales, while not having to deal with the scrutiny that comes with quarterly earnings reports.
Microsoft may invest up to $3 billion in dell
Microsoft may participate in the rumored buyout of Dell. The company is said to be in talks to invest between $1 and $3 billion with Silver Lake Partners and Michael Dell in an effort to take the struggling computer company private, David Faber of CNBC reported. The investment would be a “mezzanine financing most likely taking the form of a preferred of some kind” and not an equity stake in the company. Silver Lake Partners is said to be interested in buying Dell at $13 or $14 a share, valuing the company between $22 billion and $25 billion. Faber’s report was later confirmed by The Wall Street Journal.
The ultimate humiliation: Dell now getting advice from the ‘dell dude’ on how to fix
Ben Curtis, an actor and former spokesperson for Dell known for his catchphrase “Dude you’re getting a Dell,” believes that he can help the company he used to promote. According to Curtis, the solution is simple: bring back the “Dell Dude.” The actor represented the company from 2000 to 2003 in a series of commercials that were critically acclaimed and helped Dell become the world’s largest PC vendor. After running into some legal problems, however, Curtis was let go.
The company has struggled in recent years as consumers begin to embrace a post-PC era. Dell is reportedly in buyout talks with a private equity firm that would value the company between $22 billion and $25 billion.
Curtis doesn’t believe this is the best option, though.
“I think they’re making a huge mistake and simply need to bring back the Dell Dude!” he said in an interview with Bloomberg. “That’s it. That’s all they need to do. If they brought me back, their sales, stock and media presence would skyrocket.”
Curtis believes this would be “by FAR the smartest move they could make.”
Dell Dude? Yup, he’s a Mac user now, too
Actor Ben Curtis talks about what it was like representing and being the face of Dell in those insipid “Dude, you’re getting a Dell” commercials back when Microsoft and the PC box assemblers still had much of the world hoodwinked.
He speaks on Bloomberg Television‘s “Market Makers.”
I am using a Mac right now…
It’s sort of been one of the necessities, which I think Dell is competing with… – Ben Curtis, former “Dell Dude”
Dell founder reportedly plans to spend $1 billion of his own funds to regain control
Give Michael Dell credit — he’s apparently willing to put his money where his mouth is. Unnamed sources have told Bloomberg that Dell, the founder of Dell Inc., is planning to spend “as much as $1 billion of his personal funds” to regain control of the company and take it private. Bloomberg’s sources indicate that Dell would combine the personal funds with his own $3.6 billion stake in the company to fund just over half of the money needed to buy out Dell. The rest of the buyout would reportedly be “financed by debt and possibly some of the $11 billion of cash Dell reported” in its last earnings report, as well up to $2 billion provided by Silver Lake Management and Microsoft.
We’ve heard rumblings that Dell wants to go private because it has a truly bold plan to reinvent itself and it wants to be free to work on it away from the pressures of quarterly earnings expectations. At the very least, whatever Michael Dell has planned will be a significant upgrade from whatever advice the Dell Dude had to offer.
Deal to give the money back to the shareholders
“Dell Inc is edging closer to an agreement to sell itself to a buyout consortium led by Michael Dell, its founder and chief executive, and private equity firm Silver Lake Partners in a deal that could top $24 billion, people familiar with the matter said on Friday,” Nadia Damouni, Soyoung Kim and Greg Roumeliotis report for Reuters. “The buyout consortium is negotiating taking Dell private at $13 to $14 per share, two of the people said. This translates into an equity valuation for the Round Rock, Texas-based company of between $22.6 billion and $24.4 billion.”
Damouni, Kim and Roumeliotis report, “The transaction is set to be finalized over the weekend and the timetable could still slip, the people cautioned, asking not to be named because the matter is not public… As part of the transaction, Michael Dell will contribute his existing stake of almost 16 percent in the company toward gaining majority ownership, sources close to the matter have said. The deal would mark the largest leveraged buyout since the global financial crisis. Going private would allow Dell, which has been trying to become a one-stop shop for corporate technology needs as the PC market shrinks, to conduct that difficult makeover away from public scrutiny.”
Dell closing in on $23 billion buyout to take company private
Michael Dell is putting the final touches on a deal with Microsoft and Silver Lake Partners to take Dell private, unnamed sources have told the Wall Street Journal. According to the Journal’s sources, Dell is close to finalizing a $23 billion buyout in which founder Michael Dell will “contribute his nearly 16% stake valued at $3.7 billion and an investment firm he controls another $700 million” while “Microsoft would invest about $2 billion in the form of a subordinated debenture, a less-risky investment than common stock and Silver Lake Partners would invest more than $1 billion.” Several banks are reportedly helping fund the remaining $15 billion for the buyout through the use of debt. A final agreement hasn’t been reached yet, however, and the Journal’s sources cautioned that terms of the agreement could still change.
Dell to Go Private, Give the Money Back to Shareholders
Dell buying back its stock and going private
In a move that some will see as a delicious bit of irony, PC maker Dell is planning on buying back all of its stock from shareholders and going private. The deal will cost some US$24.4 billion and includes a $2 billion loan from Microsoft along with plenty of Apple fans throwing Michael Dell's words back in his face.
Those words came in the late 1990s when the word "beleaguered" was often said in the same breath as "Apple" when Mr. Dell publicly said he'd shut Apple down and give the money back to the shareholders. While Dell isn't shutting down, the company living up to the rest of his comment.
The company confirmed on Tuesday that Mr. Dell and Silver Lake Partners would be buying back all of the Dell's stock with the intent of taking the company private.
Word surfaced in January that Microsoft was looking into investing money in helping Dell buy back its stock, and it turns out those reports were accurate. At the time, rumors said Microsoft would be giving Dell between $1 billion and $3 billion, which is exactly what's happening.
Microsoft confirmed its $2 billion loan was real, adding "We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."
The deal still needs the approval of stockholders and will go through the standard regulatory approval process. Mr. Dell is expecting the stock buyback to be completed by the end of the company's second fiscal quarter for 2014.
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