Shares of Dell fell nearly 4 percent in trading on Friday afternoon after the Blackstone Group withdrew from the bidding for the PC maker.
The stock was trading below the $13.65-a-share offer made by the company’s founder and Silver Lake Partners to take the company private, reaching a low for the day of $13.40.
“We now believe that a higher bid is unlikely and that the $13.65 bid will gain
shareholder approval,†analysts at Jefferies wrote in a note on Friday.
Blackstone, which last month had indicated an offer of more than $14.25 a share for control of Dell, had been seen as the best chance for a higher bid to the proposed buyout. The private equity firm and the activist Carl C. Icahn were the two preliminary bidders who emerged from the Dell board’s 45-day “go shop†process to flush out alternatives to the $24.4 billion offer to take the company private.
As DealBook reported on Thursday, Blackstone said in a letter to the special committee of the Dell board, that it had decided to walk away after discovering that the company’s business was deteriorating faster than it previously understood.
Blackstone had been examining Dell’s books as a prelude to making a possible final bid.
Erik Gordon, a professor at the Ross School of Business at the University of Michigan, told Bloomberg News: “It’s rare for a private equity firm to drop out unless they’re driven out by a bidding war or they find a monster under the bed when they do due diligence. Everybody knew the PC business was falling apart. The only question was how quickly.â€
Mr. Icahn, who last month proposed an offer of $15 a share for about 58 percent of Dell, remains as a possible bidder. It is unclear what his next move will be, but some big shareholders of Dell â€" in particular, Southeastern Asset Management, he biggest Dell shareholder after Mr. Dell â€" have expressed their unhappiness with the buyout offer from the company’s founder and Silver Lake.
Earlier this week, the Dell special committee and Mr. Icahn reached an agreement that that limits Mr. Icahn’s ownership stake in the company while allowing him to contact other shareholders about a possible bid for the computer maker.
The Jefferies analysts, while expecting the buyout group to prevail, added, †We note there is still a potential for Silver Lake to slightly sweeten its offer.â€
Wells Fargo analysts said: “We believe that a Dell privatization will happen as the logic to operate outside the eye of public scrutiny to transform the company is sound.â€
