[h=3]By ANUPREETA DAS And BEN WORTHEN[/h]Dell Inc. on Tuesday said it has agreed to be taken private by a group led by founder Michael Dell, in a deal valuing the computer giant at $24.4 billion.
Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold. The price represents a premium of 25% over Dell's closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published.
The buyout reflects the combined heft of Mr. Dell, software titan Microsoft Corp., private-equity firm Silver Lake Partners and a handful of investment banks.
[h=3]Timeline: Dell's Ups and Downs[/h]
Mr. Dell, who owns about 14% of Dell's shares, will continue to lead the company as chairman and chief executive. He will continue to hold a significant stake in Dell by contributing his shares of Dell to the new company, as well as making a substantial additional cash investment.
The transaction will be financed through a combination of cash and equity contributed by Mr. Dell, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital, L.P., a $2 billion loan from Microsoft, rollover of existing debt, as well as debt financing that has been committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets, and cash on hand.
ReutersDell Inc. founder and chief executive Michael Dell
The Round Rock, Texas, company was once the world's largest PC maker and boasted a market capitalization above $100 billion. But it largely has been sidelined as tablets and smartphones became the more popular devices and PC sales shrunk.
It remains to be seen whether Dell shareholders would support the deal. Some people involved in the buyout say investors likely would take the offer because of the broader trends in the PC industry and the risk it presents to Dell.
—Shira Ovide and Ian Sherr contributed to this article.
Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold. The price represents a premium of 25% over Dell's closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published.
The buyout reflects the combined heft of Mr. Dell, software titan Microsoft Corp., private-equity firm Silver Lake Partners and a handful of investment banks.
[h=3]Timeline: Dell's Ups and Downs[/h]
Mr. Dell, who owns about 14% of Dell's shares, will continue to lead the company as chairman and chief executive. He will continue to hold a significant stake in Dell by contributing his shares of Dell to the new company, as well as making a substantial additional cash investment.
The transaction will be financed through a combination of cash and equity contributed by Mr. Dell, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital, L.P., a $2 billion loan from Microsoft, rollover of existing debt, as well as debt financing that has been committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets, and cash on hand.
ReutersDell Inc. founder and chief executive Michael Dell
The Round Rock, Texas, company was once the world's largest PC maker and boasted a market capitalization above $100 billion. But it largely has been sidelined as tablets and smartphones became the more popular devices and PC sales shrunk.
It remains to be seen whether Dell shareholders would support the deal. Some people involved in the buyout say investors likely would take the offer because of the broader trends in the PC industry and the risk it presents to Dell.
—Shira Ovide and Ian Sherr contributed to this article.