We decided not to comment this morning on the rumours in many of the serious newspapers of new bids for Dell. But they were obviously well sourced as it has now been announced that both Blackstone and Carl Icahn have tabled bids superior to the $13.65 a share offer from Micheal Dell/SilverLake. (See my 5th Feb 13 post – Dell deal announced) Full details of the new bids see FT Dell kicks off three-horse bid race.
Assuming that the Dell Special Committee agrees that they are ‘superior’ then they will invite a formal bid. Michael Dell/SilverLake then get just one opportunity to top it. That will be a tough call. Top it only marginally and you’ll lose to a second small increased bid. Top it by a lot, win and you’ll never know if the others were just stalking horses.
The FT has a wonderful spoof Transcript from Silver Lake Partners Investment Committee Meeting. My own view, for what it’s worth, is that the spoof is probably not too far from the actuality! I really suspect that Silver Lake will now walk away from the deal – pocketing their share of the $180m break fee. Blackstone’s $14.25 per share bid seems the most credible – remember this is nearly 50% up on the share price before this bidding war started.
Where this all leaves Michael Dell himself is far from clear. Does he want them? Do they want him? Is the future of Dell to be a financial engineering master class? Or is it once again going to be a growth tech company? It is extremely difficult to see Dell becoming a PC powerhouse again for no better reason than the PC market is in terminal decline. Re-inventing yourself against that kind of decline in your core business is ‘difficult’ to say the least. If you were going to do that I can think of many better places to start than Dell. Indeed ‘from scratch’ might be preferable.