Wednesday 21 March 2018

Dell could go as CEO in Blackstone takeover deal

Jeffrey McCracken, Serena Saitto and Aaron Ricadela

BLACKSTONE and billionaire Carl Icahn are offering to buy Dell without keeping on Michael Dell as CEO, spurring debate over whether the PC maker would be better off without the entrepreneur who founded it three decades ago.

Dell, which employs nearly 2,000 people in Ireland, said it has received proposals from Blackstone and Icahn that may be superior to a $24.4bn (€18.1bn) buyout plan from Silver Lake Management and Michael Dell.

As CEO, Mr Dell oversaw the company's rise to the top of the PC industry, yet failed to prepare it for new challenges in mobile technology and high-margin business services. While Dell's 15.6pc ownership stake gives him leverage to negotiate a key role, the company could benefit from new leadership that can accelerate efforts to add growth, said Erik Gordon, a business professor at the University of Michigan.

"Michael is no longer essential to Dell," Mr Gordon said. "His attractiveness as a partner to a buyer is the size of his ownership stake. If you are willing to take less than total control, you don't need him as much."

Blackstone, however, invited the executive to use his equity to participate in the transaction.

The company values Dell at $14.25 a share, while Icahn would pay $15 a share in cash for as much as 58.1pc of the stock, Dell said in a statement that included their offers. (Bloomberg)

Irish Independent

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