{"id":641553,"date":"2013-02-07T08:20:57","date_gmt":"2013-02-07T13:20:57","guid":{"rendered":"https:\/\/www.pehub.com\/?p=185395"},"modified":"2013-02-07T08:20:57","modified_gmt":"2013-02-07T13:20:57","slug":"reuters-michael-dell-ponies-up-750m-in-cash-for-deal","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/641553","title":{"rendered":"Reuters \u2013 Michael Dell Ponies Up $750M in Cash for Deal"},"content":{"rendered":"

Michael Dell<\/strong> and his investment firm are ponying up $750 million in cash toward the $24.4 billion purchase of Dell Inc.<\/strong> to help bankroll the largest private equity-backed buyout since the financial crisis, Reuters<\/em> wrote. The Dell founder and CEO this week struck a deal to take private the company he created out of a college dorm room in 1984, partnering with private equity house Silver Lake<\/strong> and Microsoft Corp.<\/strong> Michael Dell will contribute $500 million of his own cash, and MSDC Management<\/strong> – an affiliate of his investment vehicle, MSD Capital – will contribute another $250 million, according to a company filing on Wednesday.<\/p>\n

(Reuters<\/em>) – Michael Dell and his investment firm are ponying up $750 million in cash toward the $24.4 billion purchase of Dell Inc to help bankroll the largest private equity-backed buyout since the financial crisis.<\/p>\n

The Dell founder and CEO this week struck a deal to take private the company he created out of a college dorm room in 1984, partnering with private equity house Silver Lake and Microsoft Corp.<\/p>\n

Michael Dell will contribute $500 million of his own cash, and MSDC Management – an affiliate of his investment vehicle, MSD Capital – will contribute another $250 million, according to a company filing on Wednesday.<\/p>\n

Dell Inc also said it is targeting the repatriation of $7.4 billion of cash now parked abroad to help finance the deal. That may dismay some shareholders, as a hefty tax is usually levied on cash brought back from overseas.<\/p>\n

The deal, which ends Dell’s rocky 24-year run on the Nasdaq just as the once-dominant PC maker struggles to revive growth, is contingent on approval by a majority of shareholders — excluding Michael Dell himself.<\/p>\n

Several shareholders, including prominent investor Frederick “Shad” Rowe of Greenbrier Partners, have spoken out against the deal, protesting a lack of specifics as well as a potential conflict of interest with Michael Dell being the company’s single largest shareholder with a roughly 16 percent stake.<\/p>\n

“Some shareholders are glad. But there are others who feel it’s a raw deal,” said Shaw Wu, an analyst with Sterne Agee, who has spoken with several Dell shareholders since the announcement but declined to provide further details.<\/p>\n

AND SO IT BEGINS<\/p>\n

Dell was regarded as a model of innovation as recently as the early 2000s, pioneering online ordering of custom PCs and working closely with Asian suppliers and manufacturers to assure rock-bottom production costs. But it missed the big industry shift to tablet computers, smartphones and high-powered consumer electronics such as music players and gaming consoles.<\/p>\n

Executives said on Tuesday the company will stick to a strategy of expanding its software and services offerings for large companies, with the goal of becoming a provider of corporate computing services – like the highly profitable IBM . They played down speculation the company may spin off the low-margin PC business on which it made its name.<\/p>\n

The company has not given many specifics on what it would do differently as a private entity, angering some shareholders who said they needed more information to determine whether the $13.65-a-share deal price – a 25 percent premium to Dell’s stock price before buyout talks leaked in January – was adequate.<\/p>\n

On Wednesday, an individual shareholder filed the first lawsuit, in Delaware, attempting to stop the buyout. The lawsuit – which is seeking class-action status – maintains that the $13.65 per share offered sharply underestimated the company’s long-term prospects.<\/p>\n

“By engaging in the going private transaction now – in the midst of the company’s transition from a PC vendor to full service software and enterprise solution provider – the board is allowing defendants M. Dell and Silver Lake to obtain Dell on the cheap,” read the lawsuit filed by Catherine Christner.<\/p>\n

Dell, the world’s No. 3 personal computer maker, broke down details of the equity and debt financing secured for the buyout in Wednesday’s filing.<\/p>\n

Silver Lake is putting up $1.4 billion, while banks including Bank of America, Barclays, Credit Suisse and RBC will provide roughly $16 billion in term loans and other forms of financing.<\/p>\n

Wednesday’s filing also disclosed that under certain circumstances if the merger cannot be completed, Michael Dell and Silver Lake could have to pay a termination fee of up to $750 million to the company.<\/p>\n

The post Reuters \u2013 Michael Dell Ponies Up $750M in Cash for Deal<\/a> appeared first on peHUB<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Michael Dell and his investment firm are ponying up $750 million in cash toward the $24.4 billion purchase of Dell Inc. to help bankroll the largest private equity-backed buyout since the financial crisis, Reuters wrote. The Dell founder and CEO this week struck a deal to take private the company he created out of a […]<\/p>\n","protected":false},"author":7428,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-641553","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/641553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/7428"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=641553"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/641553\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=641553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=641553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=641553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}