Blackstone drops Dell bid

Pole-position suitor cites Q1 PC shipments slump

Tags: Blackstone GroupDell CorporationMergers and acquisitionsUSA
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Blackstone drops Dell bid Dell’s future is still in flux with a number of opponents standing between Michael Dell and privatisation. (Getty Images)
By  Stephen McBride Published  April 21, 2013

Blackstone Group LP, a one-time front-runner in the battle for control of Dell Corp, has reportedly called an end to its bid for the world's number-three computer manufacturer, following industry forecasts of unprecedented drops in PC shipments.

According to Reuters, three insiders said on Thursday that Blackstone would withdraw from a process that begun with CEO Michael Dell and partner Silver Lake tabling a proposal for a leveraged buyout of the company. Shareholders' objections to the ‘unrealistic' $13.65-a-share price tag led to a revolt during the go-shop period, when the board is bound to examine counter offers.

Both Blackstone and maverick investor Carl Icahn implied interest in Dell. Icahn offered $15 per share for 58% of the company, while Blackstone had proposed $14.25 per share for a complete buyout. Both bidders had intended Dell to continue being publicly traded, whereas Michael Dell and Silver Lake want to take the firm off exchanges to concentrate on bolstering its enterprise business.

While analysts consider Icahn's chances of closing a deal to be narrower than Blackstone's, the billionaire investor could still pose a problem for Michael Dell's consortium. On acquiring a hefty stake during the go-shop, Icahn had initially pushed for capital restructuring and more recently demanded a substantial dividend payout. As leverage, he raised the possibility of a proxy battle, a threat he has yet to drop.

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