Four major banks are lined up to finance the deal according to rumors
It was reported earlier this week that computer maker Dell was in talks with private equity firms to go private. Reports have surfaced today that those talks are now at an advanced stage with at least four major banks ready to provide financing. Rumors claim that Silver Lake Partners has lined up Credit Suisse, Bank of America Merrill Lynch, Barclays, and RBC to finance the deal.
Dell is currently worth approximately $19 billion and if this deal goes through it will reportedly be one of the largest since the global recession hit. Buyout discussions are floating a price of $13.50 to $14 per share. The equity investment from Silver Lake and other potential investors would be approximately $2 billion.
Michael Dell reportedly personally owns 244 million shares of his company.
Sanford Bernstein analyst Toni Sacconaghi said, "[The odds of a deal] are probably low, given its size and our expectation that it may require about $4 billion in equity."
"We see the rationale for a Dell (leveraged buyout) as being largely opportunistic given low valuation and interest rates, as we don't see any obvious restructuring opportunities or unique exit strategy."
Barclays analyst Ben Reitzes added, "Obviously, with Michael Dell's ownership of $3 billion and net worth of about $14.6 billion the possibility of a go-private transaction cannot be ruled out."
Dell is reportedly being advised on the possible buyout by JPMorgan.
Source: Reuters
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