The Southwood Group weigh the possible returns of jumping in with a last minute offer to dive in with Silver Lake should their buyout offer be rejected.
The Southwood Group has, since the start of this year been closely monitoring the progress of the special committee set up by Dell Inc, the third-biggest maker of computers in the world. The purpose of the special committee set up by Dell Inc is to evaluate options for the troubled computer giant. At that time Dell’s enterprise value was just under USD $20Billion.
A deal has been pending since January from the private equity firm Silver Lake, who have been leading the effort with its limited partners and have been rumoured to have been expecting to be joined by other private equity firms which is still a bargaining chip for them to reap rewards should they finalise the deal.
“Lenders including Credit Suisse Group, Barclays, The Royal Bank of Canada and Bank of America Corp are expected to informally disclose the terms to a small group of potential buyers of the bridging loan according to my source who I am obliged not to name as the process is private,” said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
The Southwood Group are of the impression that lenders are informally canvassing debt investors to gauge whether they can bundle up the financing necessary into manageable blocks to be offered to syndicates, once the deal is done. The technology-based buyout firms financing will be crucial to complete a leveraged buyout successfully. Michael Dell is keen to make the buyout so he can restructure the company without the pressures involved when doing so in a publicly trading environment.
“We think that Dell Inc is struggling due to the competition coming from tablet makers, such as Samsung and Apple, and this is apparent when we see the company losing a third of its’ value over the course of last year. However, it is all down to what the shareholders vote on, but we are poised to consider the financial returns that might be available; as further funding may be required from Silver Lake and partners should Michael Dell take current advice and up his current bid,” added Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
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