Dell To Go Private In $24B Deal, Microsoft Providing $2B

Dell logo_GovConWireDell (NYSE: DELL) has agreed to be acquired by global technology investment firm Silver Lake and founder Michael Dell in a deal worth approximately $24.4 billion that will take the company private.

The company said it expects the deal to close before the end of the second quarter of its 2014 fiscal year, subject to regulatory and stockholder approvals.

Michael Dell, who currently owns 14 percent of the company’s shares will continue to serve as chairman and CEO.

Microsoft (NASDAQ: MSFT) will contribute a $2 billion loan for the deal, Silver Lake will contribute cash from affiliates’ investment funds and MSD Capital L.P. will also contribute cash.

BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets have committed debt financing for the deal.

Stockholders will receive a $13.65-per-share cash payment, representing a 25 percent premium over Dell’s Jan. 11, 2013 closing price of $10.88 per share and a 37 percent premium over the average closing share price for the previous 90 calendar days ended Jan. 11.

Silver Lake and Michael Dell also intend to acquire all shares not held either by certain members of management nor by Michael Dell.

The company’s board of directors unanimously approved the merger upon the recommendation of a special board comprised of independent directors.

Michael Dell recused himself from all board discussions and votes regarding the transaction, the company said.

The agreement includes a 45-day go-shop period, where the special board is allowed to solicit and consider alternative proposals.

Successful competing bidders would be responsible for a $180 million termination fee, representing nearly 1 percent of the transaction value.

That fee rises to $450 million for successful bidders that do not qualify during that period.

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