The founder of Dell feels that the reason his company isn’t doing well is because it is stretched thin by trying to satisfy demands of the shareholders. The solution to all this? Go private, of course!
As a private company, Dell would have to put up with looser regulatory issues, shareholders would potentially benefit a lot, and the company hopes it would be able to recover from its recent downturn.
Still the private route is not all laughs and giggles — one important consideration to make is regarding the majority stake in the new privatized company.
Now according to Bloomberg, it appears that Michael Dell is willing to contribute equity financing anywhere in the range of $500 million to $1 billion from his personal funds to manage a majority stake in the privatized company.
The company founder already has 15.7 percent stake, which is worth about $3.6 billion. Another billion or so and he will be putting up more than half of the total $8 or $9 billion equity check, with the reminder of the takeover financed by debt.
Both Microsoft and Silver Lake are said to be investing from $1 to $2 billion according to people involved in the talks, though recent reports suggest that Redmond wants more of a say in the privatized company.
An announcement is expected in the coming days (or weeks), and while the company will be easier to control and manage by its leader, how much that helps with future growth remains to be seen.