Dell Inc. DELL today announced it has signed a definitive merger agreement under
which Michael Dell, Dell's Founder, Chairman and Chief Executive Officer, in
partnership with global technology investment firm Silver Lake, will acquire
Dell.
Under the terms of the agreement, Dell stockholders will receive $13.65 in
cash for each share of Dell common stock they hold, in a transaction valued at
approximately $24.4 billion. The price represents a premium of 25 percent over
Dell's closing share price of $10.88 on Jan. 11, 2013, the last trading day
before rumors of a possible going-private transaction were first published; a
premium of approximately 35 percent over Dell's enterprise value as of Jan.
11, 2013; and a premium of approximately 37 percent over the average closing
share price during the previous 90 calendar days ending Jan. 11, 2013. The
buyers will acquire for cash all of the outstanding shares of Dell not held by
Mr. Dell and certain other members of management.
The Dell Board of Directors acting on the recommendation of a special
committee of independent directors unanimously approved a merger agreement
under which Michael Dell and Silver Lake Partners will acquire Dell and take
the company private subject to a number of conditions, including a vote of the
unaffiliated stockholders. Mr. Dell recused himself from all Board discussions
and from the Board vote regarding the transaction.
A Special Committee was formed after Mr. Dell first approached Dell's Board of
Directors in August 2012 with an interest in taking the company private. Led
by Lead Director Alex Mandl, the Special Committee retained independent
financial and legal advisors J.P. Morgan and Debevoise & Plimpton LLP to
advise the Special Committee with respect to its consideration of strategic
alternatives, the acquisition proposal and the subsequent negotiation of the
merger agreement.
The Special Committee also engaged a leading management consulting firm to
conduct an independent analysis, including a review of strategic alternatives
for Dell and opportunities for the company as a public entity, and thereafter
engaged Evercore Partners.
The merger agreement provides for a so-called “go-shop” period, during which
the Special Committee – with the assistance of Evercore Partners – will
actively solicit, receive, evaluate and potentially enter into negotiations
with parties that offer alternative proposals. The initial go-shop period is
45 days. Following that period, the Special Committee will be permitted to
continue discussions and enter into or recommend a transaction with any person
or group that submitted a qualifying proposal during the 45-day period. A
successful competing bidder who makes a qualifying proposal during the initial
go-shop period would bear a $180 million (less than 1 percent) termination
fee. For a competing bidder who did not qualify during the initial go-shop
period, the termination fee would be $450 million.
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