Dell can still call off its leveraged buyout plan by Nov. 5th

Earlier this week, Dell officially confirmed its plans to take the PC maker back to being a private company via a leveraged buyout, with help from a $2 billion loan from Microsoft. The move is far from final, however, and the people in charge have the option to call the whole thing off by November 5th.

Bloomberg reports that, in regulatory documents filed to the US government this week, Dell might even consider a buyout from another party. Its founder and CEO Michael Dell has agreed to "explore in good faith the possibility of working with any third parties regarding alternative acquisition proposals."

In addition to the Microsoft loan, Silver Lake Management will also put in as much as $1.4 billion in the leveraged buyout plan, and Michael Dell is putting in $500 million of his own cash, along with another $250 million from his investment company. The rest of the money, $13.8 billion, will come from loans from other sources, with a number of banks working on financing the deal.

Dell has set up a four-member special committee that will have 45 days to take bids from other companies to acquire Dell. If such a deal is made during the 45 day period, Dell has to pay Silver Lake $180 million as a termination fee. If a counter offer is made and accepted after the 45 day period, Dell must pay a termination fee of $450 million.

Source: Bloomberg | Image via IBTimes

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3 Comments

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Some one tell me,

if a retail investor holds a few units of share, say about 150 or 200, and refuses to release it ??

I guess while in open market, many many small time traders may have had purchased Dell shares few years back and was holding it as a long term gain ??

Can dell force them to sell ?? and that too at present market rate ??

If 50%-plus-1 of the share units with VOTING RIGHTS elect to reject the deal, then the deal dies.

The reason for the Voting Rights distinction is that, often times, separate shareholder classes exist where 1 Class B share "vote" is worth 10 Class A share "votes".

As much as I never really liked Dell, I have to give them credit on this one. This will give them the freedom they need to innovate rather than being tied down by investors and lobbyists who don't understand anything about technology or how it works and what it takes to build it and only want to see their numbers increase.

Hopefully something good will come out of all this in the end. As a small business owner who always wants to do things my own way and usually profits off the bets I make, I could never deal with investors trying to tell me how to run my company.