Dell Buyout: Blackstone Group Drops Bid To Purchase Struggling Computer Maker

  @CareyDrew2 on April 19 2013 10:44 AM
Dell Computers
Buyout specialist Blackstone has reportedly dropped its bid to buy Dell less than one month after throwing down an offer to purchase the Texas computer maker. Reuters

Buyout specialist Blackstone Group (NYSE: BX) has reportedly dropped its bid to buy Dell Inc. (Nasdaq: DELL), less than one month after throwing down an offer to purchase the struggling Texas computer maker.

According to a letter from Blackstone to Dell, as cited by USA Today, a steep slump in PC shipments and Dell's eroding financial profile prompted the group to end its bid.

Reports indicate that the letter makes light of how PC shipments plunged 14 percent in Q1 and how Dell has lowered its operating income forecast since the bid was submitted.

Earlier this year, Dell agreed to go private, selling itself to CEO Michael Dell and a group of investors led by Silver Lake Partners for $24.4 billion, or $13.65 per share.

Key shareholders, including Southeastern Asset Management, a major Dell shareholder based out of Memphis, Tenn., have recently come out in strong opposition of the deal to sell to the group, citing better offers on the table.

While Blackstone proposed to buy the company for $14.25 per share, billionaire investor Carl Icahn said he would buy up to 58 percent of Dell's shares for $15 each.

Icahn had opposed the terms of Michael Dell's buyout, saying it undervalues the company. He suggested at one point that Dell instead pay a special $9-per-share dividend to stockholders.

Dell shares were down in late morning trading 51 cents to $13.42, a 3.8 percent drop.

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