Michael Dell faces pitch battle to retain control of the company he started

25 Mar 2013

Michael Dell, founder and CEO of Dell

Michael Dell is facing competition from two main contenders who may scupper his US$24.4bn bid to take computer giant Dell private. Dell’s board of directors has confirmed that the company has received two other offers.

Dell is to go private under a US$24.4bn transaction led by founder Michael Dell and global tech investment firm Silver Lake and involving loans and financing from Microsoft and major investment banks.

Dell is offering stockholders US$13.65 in cash for each share of Dell common stock they hold, in a transaction valued at about US$24.4bn.

The transaction is expected to close before the end of the second quarter of Dell’s current financial year.

A special committee formed by Dell’s board of directors today confirmed it has received two alternative proposals.

However, corporate raider Carl Icahn has entered the fray, attempting to acquire up to 6pc of Dell stock at US$15 a share with US$2bn of his own cash.

Blackstone Capital has also entered the bidding, offering shareholders the option to be bought out at around US$14.25 a share.

Michael Dell founded the company as a manufacturer of PCs while in a college dorm in Texas in 1984. The company quickly grew into a multi-billion dollar PC giant after harnessing the power of the internet and call centres to sell computers. It then expanded into a manufacturer of servers, as well as provider of IT services and software.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years