New York: Computer major Dell on Tuesday announced that its Founder, Chairman and Chief Executive Officer Michael Dell along with technology investment firm Silver Lake will acquire all outstanding shares to take the company private in a transaction valued at around USD 24.4 billion.
"The buyers will acquire for cash all of the outstanding shares of Dell not held by Mr Dell (Michael Dell) and certain other members of management," Dell said in a statement.
Under the terms of the agreement, Dell stockholders will receive USD 13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately USD 24.4 billion, the statement said.
"I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise," Michael Dell said.
The price offered represents a premium of 25 percent over Dell's closing share price of USD 10.88 on January 11, 2013, the last trading day before rumours of a possible going-private transaction were first published, it added.
The transaction will be financed through a combination of cash and equity contributed by Michael Dell, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital, a USD 2 billion loan from Microsoft as well as debt financing that has been committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets and cash on hand, the company said.
"The Dell Board of Directors acting on the recommendation of a special committee of independent directors unanimously approved a merger agreement under which Michael Dell and Silver Lake Partners will acquire Dell and take the company private subject to a number of conditions, including a vote of the unaffiliated stockholders," the statement said.
Following completion of the transaction, Michael Dell, who owns approximately 14 percent of Dell's common shares, will continue to lead the company as Chairman and Chief Executive Officer and will maintain a significant equity investment in Dell by contributing his shares of Dell to the new company besides cash investment, the company said.
The company said that the merger agreement provides for a so-called 'go-shop' period, during which the Special Committee, with the assistance of Evercore Partners, will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals.
The initial go-shop period is 45 days and following that period, the Special Committee will be permitted to continue discussions and enter into or recommend a transaction with any person or group that submitted a qualifying proposal during the 45-day period.
"A successful competing bidder who makes a qualifying proposal during the initial go-shop period would bear a USD 180 million (less than 1 percent) termination fee. For a competing bidder who did not qualify during the initial go-shop period, the termination fee would be USD 450 million," the statement said.
Dell will continue to be headquartered in Round Rock, Texas. The transaction is expected to close before the end of the second quarter of Dell's Financial Year 2014.
In India, the company recorded negative growth during the third quarter of Financial Year 2013 ended on November 2, 2012. The company during the second quarter of ongoing financial year disclosed 30 percent dip in India revenues.
First Published: Tuesday, February 5, 2013, 22:49