Dell Says Blackstone, Icahn Offers May Be Superior

Dell Inc. (DELL) Chief Executive Officer Michael Dell met this week with Blackstone Group LP (BX), which is seeking to acquire his namesake company, people familiar with the matter said.

The discussions focused on a proposal, outlined by Blackstone late last week, that values Dell at more than $14.25 a share, said the people, who asked not to be identified because the meeting was private.

Blackstone’s offer, as well as a separate proposal by billionaire Carl Icahn, could end up being superior to a $24.4 billion deal led by Silver Lake Management LLC, according to a statement earlier this week by Dell, the third-largest personal computer maker. Michael Dell, who founded the company in 1984, considers Blackstone’s offer to be management friendly, a person with knowledge of the matter said this week.

Silver Lake and Michael Dell had agreed to pay $13.65 a share in the largest leveraged buyout since the financial crisis -- a deal criticized by the company’s biggest shareholders as too low. Rival bidders had until a March 22 deadline to put forth alternatives, and the company has said it’s open to working with third parties on new proposals.

Icahn would pay $15 a share in cash for as much as 58.1 percent of the stock, Dell said this week. Under the Icahn and Blackstone plans, some shares may continue to be publicly traded.

Photographer: Matthew Staver/Bloomberg

Michael Dell, chairman and chief executive officer of Dell Inc. Close

Michael Dell, chairman and chief executive officer of Dell Inc.

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Photographer: Matthew Staver/Bloomberg

Michael Dell, chairman and chief executive officer of Dell Inc.

The challenges to the original bid, which came as Dell struggles to catch up with a new wave of nimbler competitors in mobile computing and business services, mean Michael Dell could lose control of the firm he founded in his Texas dorm room. His plan was to retool Dell as a maker of data-center gear and software for corporations -- without the scrutiny of public investors.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; David Carey in New York at dcarey13@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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