Blackstone reportedly withdraws $25B
Private-equity firm Blackstone Group has reportedly ended its $25 billion takeover bid for Dell.
Blackstone, which last month launched a bid for the computer maker to rival a $24.4 billion buyout offer from Silver Lake and Michael Dell, withdrew its bid on Thursday, sources tell the Wall Street Journal and the Financial Times (subscriptions required). The reasons for the withdrawal were not immediately clear.
CNET has contacted Blackstone for comment and will update this report when we learn more.
Blackstone submitted a tentative offer to buy the company after Dell announced in February its plans to take the company private via a $24.4 billion, or $13.65 per share, buyout by its founder and CEO Michael Dell, who owns about 14 percent of Dell’s common shares, and the private equity firm Silver Lake. Microsoft also kicked in a $2 billion loan toward the buyout, which still requires approval from a majority of Dell’s shareholders in order to go through.
Dell confirmed last month that it had received two buyout offers: one from Blackstone and the other from activist investor Carl Icahn.
According to Dell, the Blackstone proposal would have given shareholders two options: cash out or stay in. Those that cashed out would receive $14.25 per share, while those who decided to stay would receive shares “valued in excess of $14.25.”
The Blackstone proposal would have kept Dell public, meaning the company’s stock would continue to trade on the Nasdaq stock exchange. Blackstone had reportedly approached Mark Hurd, the former chief executive at Hewlett-Packard, about the possibility of running Dell if its buyout effort were successful, but Hurd denied any interest in the position.
Michael Dell reportedly said that he will only support a Blackstone buyout if he remains the company’s CEO.
Several other investment firms, including Francisco Partners, Insight Venture Management, and others, were participating in the Blackstone deal.
Icahn, a Dell stockholder who opposes the company’s plan to go private, offered a more complicated deal that includes Dell receiving a $2 billion investment from Icahn and his company, Icahn Enterprises. Dell would also be forced to take on $5.2 billion in new debt. Dell shareholders could either remain shareholders of the surviving company, or cash out at $15 per share.