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Blackstone scraps plans to acquire Dell

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(Globalpost/GlobalPost)

New York, Apr 19 (EFE).- U.S. private-equity giant Blackstone Group has abandoned plans to acquire Dell Inc., citing the PC maker's "rapidly eroding financial profile."

In a letter that Dell published on Friday, Blackstone said "a number of significant adverse issues have surfaced since we submitted our letter proposal to you on March 22nd."

The firm cited "an unprecedented 14 percent market decline in PC volume in the first quarter of 2013, its steepest drop in history, and inconsistent with management's projections for modest industry growth," as well as "the rapidly eroding financial profile of Dell."

"Since our bid submission, we learned that the company revised its operating income projections for the current year to $3.0 billion from $3.7 billion," Blackstone said.

Blackstone in March submitted a bid to acquire the PC maker for $14.25 per share, topping an offer of $13.65 per share announced a month earlier by a consortium led by the company's founder, Michael Dell.

Multi-billionaire investor Carl Icahn, for his part, has offered to buy 58 percent of Dell's stock for $15 a share, a bid that is being evaluated by the Special Committee of the Texas company's board.

Michael Dell's plan to take the company private has been opposed by numerous shareholders, who must approve the transaction, and faced rival bids from Icahn and Blackstone.

The consortium he leads includes U.S.-based private-equity firm Silver Lake and is assisted by a $2 billion loan from Microsoft, which is very interested in the survival of computer manufacturers, like Dell, that use its Windows operating system.

Dell's shares, which had fallen 3.7 percent to $13.44 shortly before Friday's close, have declined by 16.8 percent over the past 12 months.

http://www.globalpost.com/dispatch/news/agencia-efe/130419/blackstone-scraps-plans-acquire-dell