By RTT News, March 06, 2013, 10:12:00 AM EDT
(RTTNews.com) - Beleaguered personal computer maker Dell, Inc. ( DELL ) said Wednesday that its special committee of board of directors have unanimously determined that "the sale of the Company would be the best alternative for stockholders." This was revealed in a statement released on the company's ongoing evaluation of strategic alternatives.
The committee considered various options including maintaining or modifying the company's existing business plan, conducting a leveraged recapitalization, dividend policy change, and selling all or parts of the business.
The rigorous process to evaluate Dell's current risks, opportunities and strategic alternatives was conducted over a period of more than five months.
"As a result of that process, the Special Committee unanimously determined that the sale of the Company would be the best alternative for stockholders. We negotiated aggressively to ensure that stockholders received the best possible value and agreed to a $13.65 per share transaction that provides value certainty at a 37% premium above the average price for the 90 days before rumors regarding the transaction surfaced," the release said.
The company agreed in early February to be taken private in a $24.4 billion deal by its founder, Chairman and CEO Michael Dell in partnership with private equity firm Silver Lake Partners. The deal is expected to close before the end of the second quarter of Dell's fiscal year 2014.
Michael Dell and Silver Lake will pay $13.65 in cash for each Dell share, which represents a premium of 25 percent over Dell's closing stock price of $10.88 on January 11, the last trading day before rumors of a possible deal emerged.
The committee revealed that its financial adviser, Evercore Partners, is also currently actively soliciting potential alternative proposals under a robust 45-day go-shop process that concludes on March 22.
Michael Dell first approached Dell's board of directors about a buyout in August. The company then formed a special committee and hired independent financial and legal advisor's to consider strategic alternatives as well the acquisition proposal and conduct the subsequent negotiation of the merger agreement. The special committee consists solely of independent directors.
The going private deal is likely to allow Dell to focus on hardware, software and services for businesses without the scrutiny and limitations of being a public company. If the deal goes through, it would be the biggest leveraged buyout since the financial crisis.
Dell was among the worst sufferers among the technology giants during the recession. In order to drive growth and remain competitive, Dell resorted to acquisitions, cut thousands of jobs and closed plants. Of late, Dell is struggling with lower sales for desktops and laptops as consumers switch over to tablet PCs such as the iPad from Apple Inc. ( AAPL ).
Dell, founded in 1984 by Michael Dell in his University of Texas dorm room, was once a darling of Wall Street and the world's largest PC maker that boasted a market capitalization above $100 billion. Dell's market capitalization has fallen to $24.45 billion now.
In Wednesday's regular trading session, DELL is currently trading at $13.99, down $0.08 or 0.57% on a volume of 3.09 million shares. In the past 52-week period, the stock has been trading in a range of $8.69 to $17.46.
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