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US technology giant Dell nears buyout deal

1 Feb 2013

computers_lrgUS technology giant Dell is reportedly nearing a deal to sell itself to a consortium led by founder Michael Dell and private equity firm Silver Lake, which could be announced as soon as Monday.

Michael Dell is expected to take majority ownership of the business, while Silver Lake and Microsoft would become minority investors, Reuters reported Friday, citing unnamed sources.

The transaction is set to be finalised over the weekend, when the consortium will hammer out the last-minute details of the deal, the report said, adding that the timetable could still slip.

The consortium has secured up to $15bn of debt financing from Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital, the report added.

Barclays and Perella Weinberg Partners are advising Silver Lake on the deal, while JPMorgan Chase & Co is advising Dell, the report added.

As part of the deal, Michael Dell will contribute his existing stake of close to 16 per cent in the business toward gaining majority ownership, the report added.

Dell has a current market capitalisation of $23.8bn, making a potential deal the largest since a Blackstone-led consortium bought semiconductor company Freescale in 2006 for $17.5bn.

Dell had a market value of about $19bn before shares soared 13 per cent following news of the deal talks, which were first reported last month by Bloomberg.

Dell has struggled in recent years amid competition from tablet makers such as Apple.

A take-private could give the company more room to overhaul its corporate structure and focus on data centre equipment as opposed to personal computers.

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