‘Dell takeover imminent’

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IOL image michael dell REUTERS Dell founder and chief executive Michael Dell.

New York - Dell founder and chief executive Michael Dell is close to completing a deal that would take the computer company private in a 23-billion-dollar transaction, the Wall Street Journal reported Monday.

Dell, 47, is allying with Microsoft and private equity firm Silver Lake Partners to enable the deal. According to the report he is using his 16-per-cent share in the company, which is worth about 3.7 billion dollars, as collateral, in addition to 700 million dollars in cash through an investment firm he controls.

Microsoft is contributing 2 billion dollars and Silver Lake 1 billion dollars.

Four banks will provide loans worth about 15 billion dollars to finance the deal, which marks an approximate 24 per cent premium on the share price before knowledge of the deal became public last month.

Along with other computer makers Dell has been suffering by a prolonged downturn in the PC market, which has been hurt by the sputtering world economy and the shift to tablet and smartphone devices.

Dell founded the company in his college dorm room in 1984 at the start of the PC era, turning it into the world's largest PC maker with a market capitalization that at one time was worth more than 100 billion dollars. - Sapa-dpa

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