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Summary:

It looks like the Blackstone Group and Carl Icahn will be in the mix to take control of Dell — coming up with offers to rival the bid from Michael Dell and Silver Lake Partners.

Michael Dell
photo: Dell

Dell may have more than one serious suitor come Monday. After weeks of rumblings, the Blackstone Group and investor activist Carl Icahn are preparing their own rival bids to the Michael-Dell-and-Silver-Lake-Partner $24.4 billion buyout offer, according to reports on Saturday. There has been grumbling since that proposition was made public that Dell is worth more than the $13.65 per share that Mr. Dell et al. are offering. And now some potential purchasers are presumably ready to put money where their mouths are.

Dell sweepstakes gets more interesting

Bloomberg News, which has been on top of this story from the get-go, now reports that the Blackstone Group made a tentative offer for Dell late Friday, in time for the midnight deadline. The Wall Street Journal subsequently posted that activist investor Icahn, who has a 6 percent stake in the PC-and-server maker,  is likewise making a bid. Both Blackstone and Icahn have been reportedly in the hunt for weeks. Icahn and others have said Dell is worth up to $20 per share.

None of the reports named their sources and none of the companies offered comment. A Dell spokesman had no comment.

Dell’s private equity backstory

Dell management has connections to both Blackstone and Silver Lake. Dave Johnson, who Dell poached from IBM in 2009 to head up its acquisitions strategy, left Dell for Blackstone in January. John Swainson, now president of Dell’s software group, consulted with Silver Lake  Partners.

As one former Dell exec said via email: “So there you have John Swainson, previously Silver Lake and currently at Dell and Dave Johnson previously at Dell, and currently at Blackstone.  Add Marius Haas previously KKR and now at Dell, and you have a pretty interesting PE clique there.” Haas is VP of Dell’s Enterprise Solutions group.

According to the Journal‘s sources, the entry of new bidders will extend Dell’s “go shop” period for another four days.

Mark Hurd? Seriously?

Adding more intrigue to the mix, Fortune reported last week that Blackstone Group might tap Mark Hurd, Oracle co-president, to lead Dell. That raised eyebrows. Hurd left Hewlett-Packard, where he was chairman and CEO, under a cloud of accusations about sexual harassment and misuse of company expense accounts.

HP rival Oracle then hired Hurd, presumably for his hardware expertise and possibly because Oracle CEO Larry Ellison wanted to taunt HP Chairman Ray Lane, a former Oracle president. That Dell, which competed tooth-and-nail with HP for PC and server market leadership, might be run by a former HP guy would be ironic.

It’s also not at all clear whether ownership by a private equity firm will right Dell’s course. It’s missed a lot of opportunity by being late or ineffectual in the mobile device and tablet market — areas where HP has also missed the mark.

Hurd is often mentioned as a successor to Ellison at Oracle. But the tech world is littered with former successors to Ellison who are now elsewhere. Just ask Charles Phillips or Tom Siebel or Gary Bloom or Marc Benioff. Or Lane. It’s by no means a certainty that Hurd will be any more successful and he may be looking for an out. Especially since, as one Wall Street analyst put it, Oracle’s promised hardware turnaround has failed to materialize.

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  1. Can’t be good for Netflix’s stock. Ichan is up $700 million from last year when he bought 10% of Netflix’s. He is up huge and needs a boat load of cash if he is seriously in the Dell game so he is most likely about to sell Netflix hard!

  2. Oscar Alochi Sunday, March 24, 2013

    thanks

  3. This is turning into a nightmare for Dell’s customers. All of this confusion is not good.

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