Dell locked in bidding war for acquisition
Source: AFP |
March 26, 2013, Tuesday
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A BIDDING war broke out yesterday for US computer maker Dell as two new acquisition offers emerged in competition with the private buyout led by founder Michael Dell.
The company said the offers were from billionaire corporate raider Carl Icahn and investment fund Blackstone Group.
Both proposals "could reasonably be expected to result in superior proposals," but further study is needed, Dell said.
Dell said its special committee, which had set a Friday deadline, would continue negotiations on both offers.
"We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders," said special committee chairman Alex Mandl.
"We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders."
The new offers suggest Dell could bring a higher value that the US$24.4 billion proposed in the initial buyout offer. The initial offer amounted to US$13.65 per share, but Brian White at Topeka Capital said bids could go considerably higher.
"With three forces at work, we believe a higher buyout bid is in the cards and we continue to believe that an US$18 (per share) buyout price for Dell makes sense; however, it is unlikely that this price level will occur in the first round of bidding," White said in a note to clients.
Analyst Roger Kay said the new bids suggest Dell and other firms may have been unfairly punished by the stock market, amid gloomy predictions about traditional computers. The company has seen profits slump as it tries to reduce dependence on the shrinking market for personal computers.
The company said the offers were from billionaire corporate raider Carl Icahn and investment fund Blackstone Group.
Both proposals "could reasonably be expected to result in superior proposals," but further study is needed, Dell said.
Dell said its special committee, which had set a Friday deadline, would continue negotiations on both offers.
"We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders," said special committee chairman Alex Mandl.
"We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders."
The new offers suggest Dell could bring a higher value that the US$24.4 billion proposed in the initial buyout offer. The initial offer amounted to US$13.65 per share, but Brian White at Topeka Capital said bids could go considerably higher.
"With three forces at work, we believe a higher buyout bid is in the cards and we continue to believe that an US$18 (per share) buyout price for Dell makes sense; however, it is unlikely that this price level will occur in the first round of bidding," White said in a note to clients.
Analyst Roger Kay said the new bids suggest Dell and other firms may have been unfairly punished by the stock market, amid gloomy predictions about traditional computers. The company has seen profits slump as it tries to reduce dependence on the shrinking market for personal computers.
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