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Dell panel reiterates backing for founder's buyout

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(GlobalPost/GlobalPost)

The special committee set up by Dell to explore a sale of the computer giant renewed its backing Friday for the buyout led by founder Michael Dell but said it would continue talks on alternate bids.

The special committee, which now faces an apparent bidding war, said the offers from billionaire corporate raider Carl Icahn and investment fund Blackstone Group had not yet been finalized, so it was not clear if they were better for shareholders.

"We intend to work diligently with both of them to assist them in their respective due diligence reviews of the company and to seek definitive proposals that would constitute a superior proposal to the current Silver Lake and Michael Dell transaction," the statement said.

"Michael Dell has confirmed his willingness to explore participating in alternative acquisition proposals. However, there can be no assurance that either non-binding alternative acquisition proposal will ultimately lead to a superior proposal."

A Dell spokesman said preliminary documents filed with the Securities and Exchange Commission opened a period of five to 10 weeks during which any alternate plans can be reviewed.

The new offers suggested Dell could bring a higher value than the $24.4 billion proposed in the initial buyout offer, analysts said.

The initial offer backed by the investment firm Silver Lake and with a loan from Microsoft, amounted to $13.65 per share.

The proxy statement said however it was not clear if a higher offer was merited because of the challenges of the PC industry.

The document cited "significant and increasing competition from efficient, low-cost manufacturers relying primarily on a build-to-stock business model, rather than the build-to-order business model historically used by the company, and from manufacturers of innovative, higher-margin PC products, which competition could result in reduced profit margins, further loss of market share for the Company's products and services, or both."

It also cited "the uncertain adoption of the Windows 8 operating system and unexpected slowdowns in enterprise Windows 7 upgrades, increasing consumer interest in tablets and smartphones."

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http://www.globalpost.com/dispatch/news/afp/130329/dell-panel-reiterates-backing-founders-buyout