2:43 p.m. | Updated
The Blackstone Group has sent a preliminary deal proposal to Dell Inc., people briefed on the matter said on Saturday, signaling that the investment giant may make a formal bid for the computer company.
The letter, sent late Friday night, was meant to keep talks going with a special committee of Dell’s board, one of these people said. It was not clear whether the Dell committee would choose to continue negotiating with Blackstone, though it is expected to make a decision as soon as Tuesday.
The company’s directors have spent the last 45 days trying to find alternatives to a $24.4 billion offer from Michael S. Dell and the private equity firm Silver Lake.
By the end of last week, advisers to the Dell directors were expecting initial proposals from both Blackstone and the billionaire Carl C. Icahn. Others that had been invited to participate in the go-shop period, including Hewlett-Packard and Lenovo, had long ago been discounted as potential buyers and were instead seen as simply taking a look at Dell’s books.
A spokesman for Dell declined to comment.
The emergence of potential rival bidders for Dell could help lift the price of a deal that shareholders have loudly complained is too low. Two of the company’s biggest outside investors, Southeastern Asset Management and T. Rowe Price, have said that they will not accept the current price of $13.65 a share.
Mr. Icahn, who has amassed what he calls a “substantial” stake in Dell, told its special board committee privately that he, too, opposed the current transaction and favored paying out a special dividend instead. He agreed to participate in the evaluating process last week.
Shares of Dell closed unchanged at $14.14 on Friday, indicating that investors were expecting a higher takeover offer.
Blackstone has spent several weeks talking with prospective partners, including TPG Capital and General Electric’s GE Capital arm. The firm has also spoken with Southeastern.
And it has approached technology executives like Mark V. Hurd, the president of Oracle Corporation, about potentially serving as chief executive of Dell should Mr. Dell decide to step down. So far, however, Mr. Hurd has expressed little interest, according to a person briefed on the matter.
Among the people leading Blackstone’s efforts is David Johnson, who until earlier this year was Dell’s in-house deal maker, people briefed on the matter have said.
The details of Blackstone’s offer were not immediately available. Among the possibilities the firm has considered is teaming up with GE Capital, which would take control of Dell’s financial services arm.
But Blackstone still faces some hurdles in putting together a final bid. Among them is arranging the enormous amount of financing needed. While Mr. Dell has committed to talking with potential rivals to Silver Lake — an important concession, since he controls about 16 percent of the company’s stock and is contributing $750 million — he is not obligated to strike an agreement with them on the same terms.
Article source: http://dealbook.nytimes.com/2013/03/23/blackstone-said-to-send-preliminary-offer-to-dell/?partner=rss&emc=rss