Dealbook just reporting on the possibility of Dell going private. Along the way there are numerous obstacles. For one, the deal is much to big to be done by a single fund. Second, the tax implications are huge depending on where the money is raised and where it goes.
"But in its most recent annual report, Dell said that only about 10 percent to 20 percent of its cash pile was held in the United States, meaning the company would take a potentially big tax hit if it were to bring that money back onshore. Because of that, analysts at Goldman Sachs estimated in December that the return on an L.B.O. could be as low as 8 percent. Avoiding the tax man could bolster that return to 31 percent."
Lastly, there is a concern that there would be a debt laden company that has struggled for the last five years trying to make a turnaround.
http://dealbook.nytimes.com/2013/01/15/the-challenges-of-taking-dell-pr…
My question is this: whats the probablity that this gets done? Additionally, does anyone get the feeling that Mike Dell is trying to save his baby? I wonder if this is a case of a founder just being too attached. Thoughts fellow monkeys?
Dude, you're getting a buyout!
According to zerohedge it only took 4 seconds for algos digest the headline. Gotta love technology
http://www.zerohedge.com/news/2013-01-14/it-took-algos-4-seconds-fully-…
Appropriate username for posting this one up.
Back on dec GS UG'd this thing on a possible LBO candidate as well.
No idea how they get the funding for that thing unless there is some work around on the cash issues... News is saying 6 weeks till an announcement is made so guess we can kick back and watch the fire works.
4 seconds is a lifetime nowadays in algo. Collocate is almost necessary.
I still don't get the point of going private. I'm sure Mike Dell knows something that we don't. Maybe something in the product pipeline? Also, what about the exit for PE. Who would want to buy that big of chunk of private Dell?
It will not get done unless Michael Dell buys it out mostly himself. Only Silver Lake is in discussion with Dell and thats a huge investment for them, too huge.
The question is, can Michael Dell even turn it around privately when he can't publically? Is that worth the HUGE pricetag? Nope.
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