New York, Feb. 2 (Reuters): Dell Inc is edging closer to an agreement to sell itself to a buyout consortium led by Michael Dell, its founder and chief executive, and private equity firm Silver Lake Partners in a deal that could top $24 billion, people familiar with the matter said on Friday.
The buyout consortium is negotiating taking Dell private at $13-$14 per share, two of the people said. This translates into an equity valuation for the Round Rock, Texas-based company of between $22.6 billion and $24.4 billion.
Dell shares reacted positively to the development on Friday.
Michael Dell is expected to take majority ownership of the world’s third-largest personal computer maker, while Silver Lake and Microsoft Corp will become minority investors, three of the people said.
The transaction is set to be finalised over the weekend and the timetable can still slip, the people cautioned, asking not to be named because the matter is not public.
The investment group, which held negotiations with Dell’s camp in New York on Thursday, has secured up to $15 billion of debt financing to take Dell private from four investment banks — Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital — people familiar with the matter said.
Barclays is also advising Silver Lake on the transaction, along with Perella Weinberg Partners. JPMorgan Chase & Co is advising Dell.
Representatives for Dell, Microsoft, Silver Lake and Barclays declined to comment. Perella Weinberg could not be immediately reached for comment.
As part of the transaction, Michael Dell will contribute his existing stake of almost 16 per cent in the company toward gaining majority ownership, sources said. The deal would mark the largest leveraged buyout since the global financial crisis.
Going private will allow Dell, which has been trying to become a one-stop shop for corporate technology needs as the PC market shrinks, to conduct that difficult makeover away from public scrutiny.
Dell has formed a special committee of its independent directors and hired Evercore Partners to assess whether the company is getting the best deal for shareholders.