GLOBAL TECH WRAP: Dell sells itself

Michael Dell

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

PC maker Dell is going private.

A $US24.5 billion deal (a 25% premium on Dell’s recent Nadaq share price) is being financed by founder Michael Dell, private investment company Silver Lake Partners and a $US2 billion loan from Microsoft. Mr Dell is looking for a freer hand as his company diversifies beyond the commoditised PC market. And Microsoft says it just wants to “support the PC ecosystem.” But NBR suspects Microsoft will chip in with a strong opinion: make lots of Windows-based tablets (its own Surface has so far been a slow mover).

Dell shares [NAS:DELL], which enjoyed a 14% run-up to $US13.52 when Bloomberg broke news of the deal January 17, were up 1.17% to $US13.43 in late trading today, valuing the world's third largest PC maker (after HP and China's Lenovo) at $US23.32 billion - a little below the deal price (and well off its $US140 billion high during the dotcom boom).

Dell began in its namesake's college dorm room. The company diversified into areas such as storage, networking and IT services as the PC market slowed, but has faced tough competition in increasingly commoditised markets, and made only tepid moves into the fast growing smartphone and tablet markets.  In the third quarter of 2012, Dell's profit slipped 47% against the year-ago quarter to $US475 million on revenue that fell 11% to $US13.7 billion. PC sales accounted for roughly half of revenue.


1 · Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

1 Comment & Question

Commenter icon key: Subscriber Verified

Hmm Microsoft must have really pissed the author off in a previous life, any chance to have a dig

Reply
Share
  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7092 -0.0095 -1.32%
AUD 0.9277 -0.0112 -1.19%
EUR 0.6458 -0.0099 -1.51%
GBP 0.4640 -0.0050 -1.07%
HKD 5.4980 -0.0748 -1.34%
JPY 88.0250 -0.9600 -1.08%

Commods

Commodity Price Change Time
Gold Index 1188.0 0.200 2015-05-28T00:
Oil Brent 63.2 -1.210 2015-05-28T00:
Oil Nymex 57.7 0.120 2015-05-28T00:
Silver Index 16.6 0.022 2015-05-28T00:

Indices

Symbol Open High Last %
NZX 50 5777.6 5844.9 5777.6 1.17%
NASDAQ 5093.1 5099.4 5098.0 -0.55%
DAX 11685.7 11704.4 11677.6 -2.26%
DJI 18128.1 18128.1 18126.1 -0.64%
FTSE 7040.9 7069.9 7040.9 -0.80%
HKSE 27398.3 27604.3 27454.3 -0.11%
NI225 20510.3 20636.4 20551.5 0.06%