Michael Dell may have another bidder to outdo
Blackstone could be mulling its own offer for the PC maker. Dell's $13.65 per share proposal is looking skimpy.
According to Bloomberg News, Blackstone Group is considering whether to top the $24.4 billion offer CEO Dell and Silver Lake Partners have made for Dell (DELL) the company. Activist investor Carl Icahn has argued that their $13.65 per share offer for the Round Rock, Texas-based company significantly undervalues it. Icahn has pressed for a special dividend instead.
Dell's two largest outside investors, Southeastern Asset Management and T. Rowe Price, have also criticized the Dell and Silver Lake offer for being too low. Analysts surveyed by Bloomberg expect a bid could reach $15 per share, which seems more reasonable.
Dell's board has until March 21 to seek a better offer than the one its founder has made with Silver Lake. So far, two other logical buyers for Dell, Hewlett-Packard (HPQ) and China's Lenovo, have reportedly taken a pass, underscoring the fact that they have plenty of problems of their own. Dell would be a challenge for any company to turn around.
Ever since Michael Dell returned to the CEO job in 2006, investors have expected the computer company to assume a leadership role in the tech industry. That just hasn't happened. Not only did Dell lose its title as the world's largest PC maker, but its efforts to gain a foothold in new markets such as smartphones and tablets have flopped.
Ironically, Dell's recent earnings were better than what analysts had expected, which admittedly wasn't too difficult. The results, though, indicated that Michael Dell's strategy of focusing on business customers was starting to pay off. This stoked suspicions that he was taking the company off shareholders' hands for much too cheap of a price.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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