Blackstone steps away from possible Dell buyout

Apr 19, 2013
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Blackstone steps away from possible Dell buyout

The Blackstone Group LP has announced that it has officially backed away from any attempts to purchase Dell Inc. Blackstone had stepped up with an attempt to top a leveraged buyout attempt by Dell Inc. founder Michael Dell and a consortium of other companies that were attempting to take Dell Inc. private. Previously, Michael Dell had asked for guarantees that he could remain as CEO before he would consider the buyout offer from Blackstone.

Blackstone has now changed its mind and announced that it is ending its pursuit of purchasing Dell. The Wall Street Journal reports that Blackstone has issued a letter to the special board committee that it had been working with during the negotiations notifying them of their discontinued interest in the purchase. Reports indicate that Blackstone cited declining personal computer sales across the industry is a factor in its decision.

Other factors that Blackstone cited included concerns about Dell's declining operating income, according to a source claiming to be familiar with negotiations. No official comments offered by Dell or Blackstone. Reports indicate that Blackstone had a team at Dell HQ in Texas working on due diligence for the potential purchase. That due diligence raised doubts for Blackstone about the future of the Dell PC business according to people familiar with the situation.

With Blackstone out of the picture, it leaves Michael Dell and his backers as well as investor Carl Icahn in the running to purchase the company. The potential offers on the table from Blackstone and Icahn were viewed by some members of the special Dell board committee as superior to the offering by company founder Michael Dell and Silver Lake. Whether or not an official offer is made by Icahn remains to be seen.

[via Wall Street Journal]


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