Dell Is Ripe for a Leveraged Buyout: Lerner

Your next video will start in

Recommended Videos

  • Info

  • Comments


July 18 (Bloomberg) -- Bloomberg's Cristina Alesci and Josh Lerner, professor at Harvard Business School, discuss the ongoing battle for Dell and why it has turned into a matter of valuation. They speak on Bloomberg Television's "Bloomberg Surveillance."

Cristina alesci, what do you know about what the delta will take place today?

The special committee is going to be here today.

The airborne to open up a meeting of shareholders and probably shut it down and delay the altera until later -- and delay.

Vote -- delay the vote until later this week.

You can vote electronically.

What they hope to do is force michael dell and silverlake to reconsider in the face of all of these protests from shareholders.

What will likely happen is that michael dell and silverlake will tell the shareholders, this is our best and final offer.

Shareholders will have to decide yes or no.

They can change their vote from no to yes.

Josh lerner has seen deal after deal.

What with the board of directors and the disgruntled shareholders like to see michael dell do?

This is a classic company that is ripe for a leveraged buyout.

It has a really good core, but it has been buffeted by the winds of fortune.

We have seen this again and again whereby a groups have been able to come in and create value for everybody.

I agree with that.

Why why aren't we seeing a true lbo?

Did they set the price too low?

This is a smokestack, metal- bending business.

Coming up with a valuation is hard.

You can set the glass is half empty or half full.

Maybe we should be comparing this to the $18 a share it was trading at 15 months ago ha or to the $10 or $12 a share it was trading at -- ago or the $10 or $12 a share it was trading at two months ago.

Cristina alesci, if they delay the vote and it does not happen today, do we hear a higher bid?

Do we hear from carl icahn?

Carl icahn once this vote to go through today.

He wants an up or down say on whether shareholders agree on the $13.65. some shareholders are in his camp right now and could change their vote.

There is a lot of risk on the table for iscarl icahn.

He wants to take this company over.

He is telling shareholders, do not focus on the short-term drop or the short-term volatility.

Long term, there is now you.

The company has done 15 gaza billion in the acquisitions and are just starting to see the fruits of those acquisitions.

Josh greene is with us in new york.

These people are hugely respected in my world.

These are the names.

They are saying no to michael dell?

. what happens if there is a vote and it fails?

If this vote goes through in favor of carl icahn and we move this soap opera down the road, is this a $10 stock?

A lot of it comes to how credible the icon double-cross icon offer is.

It is the classic -- a lot of it comes down to how credible the, i kind offer is.

It is the classic bird in hand being worth more than in the bush.

I want to know what happens with michael dell?

What recourse does he have in the voted does not go through?

He has to have a hard discussion with silverlake.

They could call the shareholders' bluff and say, this is our best new final.

The rest is on you guys.

That is his leverage.

Carl icahn is saying, look what happened to this company when michael dell took the reins back.

The share price has gone down dramatically.

Why would you let this guy who does done a series of expensive acquisitions and buybacks take the reins of the company, which he thinks is undervalued.

There is the game set up.

Professor, you teach game theory at harvard business school.

When you teach the course, how does this end?

It is not a prisoners' dilemma, but an offshoot of that.

How does this end?

The greater than greater thansilverlake brings to the table -- the credibility that silverlake brings to the table could result in some kind of buyout action.

Cristina alesci is near

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change