Dell Inc founder Michael Dell's efforts to take the PC company private
began last summer with an idea pitched by its top institutional
shareholder, Southeastern Asset Management.
Here is a timeline of the discussions as disclosed on Friday in Dell's preliminary proxy statement
Southeastern Asset Management, which owns 146.5 million shares
or about 8.4 percent of Dell, contacts CEO Michael Dell to suggest "a
going private transaction" and expresses the fund's interest in
participating in it.
Michael Dell meets a representative
of private equity firm Silver Lake Partners at a conference and they set
up discussions in August. In these talks, Silver Lake suggests to
Dell's founder he should take the company private.
August 11, 13
Michael Dell meets with a representative of another private equity firm,
identified in the proxy only as "Sponsor A," to ask what it thought of
such a transaction. Sources told Reuters Sponsor A is private equity
firm KKR & Co LP. KKR declined to comment.
Dell informs board member and lead independent director Alex Mandl that
he is exploring a buyout but says he has made no decision.
The board has a teleconference during which Michael Dell briefs them
on the take-private idea and discussions surrounding it. The board
decides to consider a potential transaction and other strategic
The board forms a special committee
consisting of Mandl, former co-director of Goldman Sachs' Americas
equity research unit Laura Conigliaro, Marathon Oil Chief Financial
Officer Janet Clark and consulting firm Duberstein Group CEO Kenneth
Duberstein. Mandl is subsequently appointed chairman of the special
Dell reports weak second fiscal quarter
results. Revenue of $14.5 billion was about $300 million less than what
management had expected. The company lowers fiscal 2013 outlook.
24 to 29
Mandl holds discussions with investment bankers JPMorgan Chase
& Co and Goldman Sachs Group Inc to select a financial advisor.
JPMorgan is retained.
JPMorgan tells the special
committee it has identified other financial sponsors as potential buyers
but notes that Silver Lake and KKR are best placed as each could
complete a transaction with significant committed equity.
Silver Lake and KKR submit preliminary proposals to acquire Dell.
Silver Lake's purchase price is between $11.22 and $12.16 per share, and
KKR's purchase price is between $12 and $13 per share. Both assume
Michael Dell would participate in the deal. KKR also assumes
Southeastern would participate.
The special committee
discusses with Dell Chief Financial Officer Brian Gladden potential
strategic alternatives such as returning capital to shareholders through
a leveraged recapitalization, accelerating the company's current plan, a
transformative acquisition and separating certain businesses.
JPMorgan informs Silver Lake and KKR the special committee is not happy with the price ranges.
Dell hires Boston Consulting Group to review strategic alternatives.
KKR withdraws from the process, mainly because it is not comfortable with the risks associated with Dell.
Silver Lake submits an updated proposal to acquire Dell for $12.70 per share.
Mandl invites another firm, identified in the proxy only as
"Sponsor B," to consider making a proposal. A source told Reuters
Sponsor B is private equity firm TPG Capital LP. TPG did not respond to a
request for comment.
Mandl informs Silver Lake its
offer price is too low. Silver Lake seeks permission to involve
Microsoft Corp, from which it intended to seek financing.
The company enters into confidentiality agreements with debt
financing sources of Silver Lake: RBC Capital Markets, Credit Suisse
Securities, Barclays Capital, and Bank of America Merrill Lynch.
Michael Dell meets with senior representatives of TPG to discuss a potential proposal.
TPG informs it is withdrawing from the process, primarily due to "risks and uncertainties in the PC business."
January 16, 2013
Silver Lake submits another proposal to acquire Dell for $12.90 per share.
Mandl tells Michael Dell the special committee is willing to
support a transaction at a price of $13.75 per share. Michael Dell then
discusses it with Silver Lake, which later proposes a price of $13.25
Silver Lake informs Dell it is willing to increase its offer price to $13.50 per share.
Silver Lake increases its offer to $13.60 per share.
A party identified as "Strategic Party A" expresses interest in
purchasing Dell's financial business for about $3.5 billion to $4
billion. Blackstone Group LP also expresses interest in exploring a
transaction. It could not be confirmed whether Strategic Party A IS
General Electric Co , which sources previously said had been approached
by Blackstone. GE has previously declined comment.
Southeastern informs special committee it would oppose any deal in the
range of $14 or $15 per share that did not provide existing large
stockholders with an opportunity to participate.
Michael Dell and
Silver Lake say they are not interested in pursuing a deal in which any
public stockholders would retain an interest.
Lake submits a revised proposal, offering $13.60 per share if the
company continues paying its regular dividend, or $13.75 per share if
the company stops paying dividends.
Silver Lake ups its offer to $13.65 per share, with the Dell allowed to carry on paying its regular dividend.
Special committee recommends accepting Silver Lake's proposal.
A deal with Silver Lake is announced and a 45-day period starts to
uncover other offers. Dell contacts 67 parties, including 19 strategic
parties, 18 financial sponsors and 30 others such as sovereign wealth
funds. Unsolicited inquiries are also received from four parties,
including two strategic and two financial sponsors.
Activist investor Carl Icahn sends a letter to Dell's board stating he
is a substantial holder of shares. Icahn later reveals he has $1 billion
worth of Dell shares.
Dell advisor Evercore receives
an indication of interest from Strategic Party A for a proposed
acquisition of Dell's finance business.
Icahn Enterprises send proposals to the special committee. Blackstone,
which teamed up with Francisco and Insight Venture partners, offers in
excess of $14.25 per share for the whole company, while Icahn offers
about $15 per share for 58 percent. Under both proposals, Dell would
remain a public company.
Dell releases 274-page preliminary proxy statement on its buyout negotiations.
(Also see: Dell takeover battle: All you need to know)
© Thomson Reuters 2013