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Carl Icahn and Blackstone fight Michael Dell for Dell PC company

Warwick Ashford

US billionaire investor Carl Icahn and private-equity group Blackstone are to fight Michael Dell in a bidding war over the computer company he founded.

In an attempt to regain control of Dell after 24 years to reverse its recent declines, Michael Dell and private equity firm Silver Lake made a $24.4bn purchase offer in February, with a $2bn loan from Microsoft.

But the biggest shareholders were unhappy with the deal, which valued the company at $13.65 a share, well below their estimation of $24 a share.

Investor Carl Icahn entered the fray over Dell's sale in support of the unhappy shareholders, urging the board to commit to the special dividend of $9 a share if Dell shareholders voted against the sale to Michael Dell and Silver Lake.

But now Icahn and Blackstone have entered the bidding war with expressions of interest rather than formal, full-scale bids, before the weekend deadline, according to the Guardian.

The value of the competing bids is yet to be confirmed but Reuters reported that Blackstone’s bid is believed to be up to 10% higher than Michael Dell’s.

Dell rose to success through online sales of cheap PCs and low production costs, but now has only a 10% share of the global PC market with the rise of tablets and smartphones.

Analysts believe Michael Dell’s turnaround plan is based on shifting Dell’s business to software and services in the face of a shrinking PC market.

 


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