Michael Dell launches $2.4bn buyout 'to restore reputation'

Feb 6, 2013

'Hungry' tycoon who started computer business from college dorm room seeks to retake control

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MICHAEL DELL has launched a $24.4 billion buyout bid to restore the computer maker he launched nearly 30 years ago to its former glory.

In what would be the largest take-private deal since the 2008 financial crisis, Dell has joined forces with Microsoft and private equity firm Silver Lake Partners to take his firm off the Nasdaq stock exchange after 25 years.

The buyout would release pressure on Dell to deliver strong results every quarter to shareholders, analysts told the BBC.

But the deal – which is not complete and will require shareholder approval – comes at a time when the personal computer industry is declining. There are also questions about how much influence Microsoft will have on Dell's strategy.

As CEO and chairman, 47-year-old Dell already owns 14 per cent of the shares. Reuters reports that some analysts believe the buyout is an attempt "to repair his reputation as a visionary CEO".

Analyst Cindy Shaw said: "Michael Dell is once again hungry. Thirty years ago, we think he hungered for success and wealth. In 2013, we think he hungers to restore his legacy and personal balance sheet."

Dell started the company from his university dorm room in 1984 but when he stepped away from day-to-day management in 2004 sales slipped. Despite resuming power in 2007, stock values and sales continued to dip, with the company struggling in the face of growth of cheaper Asian rivals and the smartphone market.

Taking the company private may give the entrepreneur the chance to run his business like a start-up again, the FT notes. Dell said in 2011: "While we are certainly a large corporation today, I still consider us very much a start-up at heart".

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