Dell Looking For a Buyout?

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Dell Inc., one of the world’s biggest PC makers is said to be in buyout talks with private-equity firms. The American multinational computer technology corporation lost almost a third of its value last year but news of a buyout has caused shares to surge.

Dell Inc is in talks with private-equity firms about possibly going private, a source familiar with the matter told Reuters, confirming a Bloomberg News report. It was not clear how many firms might be involved, or how much of the company Michael Dell might own after a deal, relative to the 14 per cent he controls now. It is also not a new idea; he told an investor conference in June 2010 he had considered it before.

A deal could be announced as soon as this week, one person said. The discussions could fall apart because firms may not be able to line up the needed financing or resolve how to exit the investment in the future, the people said. Taking the company private could help Dell, the third- largest PC maker, accelerate efforts to revive growth and cope with competition without quarter-by-quarter scrutiny from public shareholders.

“The company essentially has to re-make itself by de-focusing on hardware and re-focusing on software and services. This would give the company more time to effect this turn-around,” said Ashok Kumar, an analyst at Maxim Group.

Michael Dell started the company in 1984 out of his college dorm room with $1,000, and led it to the top of the PC industry. The TV ad slogan “Dude, you’re getting a Dell” become one of the best-known catchphrases of the early 2000s. In fact, I have been using a Dell Latitude laptop since 5 years without a single issue. Moreover, I plan to get another one soon.

Dell stocks jumped 13 percent after Bloomberg reported the talks, closing at $12.29 in New York.