Dell says it has regulatory clearance for buy-out

4 Oct 2013

NEW YORK CITY, USA: US computer company Dell says it received regulatory clearance for a buy-out led by company founder Michael Dell. The deal is expected to close by the end of October.

Dell shareholders approved the plan 12 September after a bitter proxy fight, with opposition led by billionaire investor Carl Icahn, claiming the plan under-valued the former number one computer manufacturer.

The proposal, worth about US$25bn, will remove Dell shares from the market and allow Michael Dell to make changes out of the spotlight of Wall Street.

Under the terms of the transaction, Dell shareholders will receive US$13.75 in cash for each share of Dell common stock, plus a special cash dividend of 13 cents per share. The total transaction is valued at about US$24.9bn.

The transaction comes amid a shift in the technology sector with the rise of smartphones, tablets and other mobile devices at the expense of the once-mighty personal computer.

Michael Dell created the company from his dormitory room at the University of Texas and grew the Round Rock, Texas-based company into a global heavyweight known for direct service to customers and cutting out the retailer.

But diminishing PC sales have led to seven straight quarters of declining profits. And the special committee established to consider Dell's strategic options gave a bleak outlook for the future of the PC market.

Analysts say Dell must implement some radical changes to bolster its presence in the software and services businesses to make up for declining sales of PCs.

Source: AFP via I-Net Bridge

Source: I-Net Bridge

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