Michael Dell launches $22bn bid to save PC maker he founded
Analysts believe PC market is in terminal decline as consumers turn to smartphones and tablets
THE CRISIS in the PC market is set to trigger the biggest buyout since the financial crisis of 2007, according to The Guardian. Michael Dell, founder of Dell Computers, is teaming up with Silver Lake Management to mount a $22 billion bid for the firm he founded.
Last year Dell's sales to retailers dropped by 12 per cent and its stock market valuation plunged by a third. The entire PC market shrunk by 13 million boxes in 2012 and analysts believe the market is in terminal decline as consumers switch their attention to smartphones and tablets - markets where none of the five biggest PC makers have a strong presence.
PCs account for 70 per cent of Dell's revenues but the company is now trying to shift to selling business services such as hosting corporate servers and keeping software and data in the so-called 'cloud'. A similar strategy helped IBM to survive.
Michael Dell founded Dell Computers in 1984 and still owns 16 per cent of the company. Silver Lake has lined up a cartel of banks to fund the deal.
News of a potential offer caused Dell shares to shoot up 18 per cent on Friday to close at $18.24 on the US NASDAQ exchange, valuing the company at $22 billion. Taking the company private would enable the firm to be restructured away from the prying eyes of stock market analysts and independent investors.