Dell buyout becomes a three-way tussle

Fresh interest in US tech giant Dell has opened up a three-way bidding war for the company, which may see founder and CEO Michael Dell miss out on a deal.

Ahead of a Saturday (23 March) deadline, financial services company The Blackstone Group and billionaire investor Carl Icahn both lodged interest in Dell, with financial proposals that may trump the current bid from the CEO and private equity firm Silver Lake which seeks to take the firm private.

A source close to the situation told Reuters that Blackstone’s preliminary bid exceeds $14.25 per share, while Icahn is proposing to buy 58 per cent of the company for $15 per share. The American tycoon has built up a minority stake in Dell and opposes the Silverlake-funded bid for the whole firm, valued at $13.65 per share.

The source says a special committee on Dell’s board is now evaluating the proposals and could make an announcement as early as Monday. But with the new bidders both planning to keep a portion of Dell’s stock publicly traded, comparing the offers may prove complex – potentially delaying an outcome.

Despite the new competition, ISI Group analyst Brian Marshall said in a report on Sunday that he did not expect Silver Lake to raise its offer significantly above the rival bids, "given significant challenges facing the PC business and a long transformation ahead."

Following the initial agreement for Silver Lake and Michael Dell to buy out the company for $24.4 billion (£15.5 billion), we analysed what direction a private Dell make take.