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Finalized: $DELL Goes Private at $13.65 Per Share

“$DELL has officially announced that it’s going private after weeks of reports and negotiations.

The final price is $13.65 a share. The deal is valued at $24.4 billion.

Company founder Michael Dell is taking the company private in partnership with private equity firm Silver Lake.

According to the release, the buyout will be funded by a big consortium. Dell and Silver Lake are going to finance it along with Microsoft which is kicking in $2 billion as a loan, according to the release. Other financing will come from BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.

Microsoft’s involvement in the process is particularly noteworthy. The reason Dell is going private is that its business of selling Windows-based PCs has not been going well. If, as a private company, Dell wanted to initiate a radical change and break away from its reliance on Microsoft, that would appear less likely with Microsoft’s involvement.

And from Microsoft’s perspective, it is likely to upset its partners. Remember, the entire PC industry is in decline. This isn’t a Dell-only problem. If HP is on the cusp of going to out of business, will Microsoft rush in with billions of dollars to bail it out?

At $13.65 a share, Dell says in the release it’s buying the company for a 25% premium over the stock’s closing price before news leaked of a potential buyout.

We expect there will be multiple shareholder lawsuits over this deal. Just a year ago, the stock was trading at ~$17.66 a share. Today, Dell and Silver Lake want to buy the whole thing for considerably less. Dell has a 45-day “go-shop” period where the board can look for a better deal….”

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