Dell has said it has received alternative buyout proposals that could be superior to $24.4 billion (18.9 billion euro) offer from founder Michael Dell and private equity fund Silver Lake Partners.
Those alternatives have come from Blackstone Group and billionaire investor Carl Icahn.
However, the struggling technology giant said the special board of directors committee considering a sale continues to favour the bid from Michael Dell and Silver Lake.
The committee was evaluating the new takeover proposals to decide whether either or both offers are likely to trump the existing take-private deal, Reuters reported, quoting a source familiar with the discussions.
Icahn has offered $15 per share for 58 percent of Dell, while Blackstone has proposed paying more than $14.25 per share for the whole company. The Silver Lake group had agreed to buy all of Dell for $13.65 per share.
One issue for the special committee is how to compare the three proposals. Both Blackstone’s and Icahn’s proposals envision that a portion of Dell’s stock will remain publicly traded.
The rival bids for Dell throw the future of the PC-maker into question. A “go-shop” period – during which the target company actively looks for rival offers – for a deal of this size rarely yields competing offers. The bids now could potentially turn the sale of Dell into a three-horse race, which could drag out for months.
It also could threaten the future of Michael Dell, who founded the technology giant at the age of 19 with just $1,000. Under the Silver Lake plan, he planned to contribute his roughly 16 percent share of Dell’s equity to the deal, along with cash from his investment firm MSD Capital, and to remain CEO of the company. Silver Lake is putting up $1.4 billion in the deal.
Neither of the new bidders wants to buy the whole company, however, with Mr Icahn offering to buy 58% and Blackstone saying it would buy out any shareholders who wanted to sell their holdings, but not specifying how much of the firm it wants to acquire.
Dell’s largest independent shareholder, Southeastern Asset Management, says the offer from Michael Dell, who owns 16% of the company, “grossly undervalues” it.
Any of the offers would need to be approved by a majority of Dell shareholders, excluding the founder.
The computer maker has been hit by the rising popularity of tablet computers and is diversifying into more profitable areas of technology, such as business software, data analytics and storage.