Dell Structuring $24.4 Billion Privatization Deal

Michael Dell is moving forward with his plans to privatize the company he founded. According to Reuters, the buyout features Dell and a consortium of financiers including Silver Lake Partners.

Taking Dell private will come at a cost of $13 to $14 per share for a maximum buyout price of $24.4 billion. Estimates over the last several months have placed the cost of a buyout between $22 billion and $25 billion.

According to recent reports, Dell, who owns a $3.6 billion stake in the company, will contribute additional capital to secure a majority ownership in the new privately held company.

Another rumor points to Microsoft contributing between $1 billion and $3 billion for a minority stake in the company.

Michael Dell’s current ownership in the publicly traded version of Dell has been seen as a conflict of interest. That conflict has led the company to hire independent directors and advisory firm Evercore Partners to ensure the best deal possible for shareholders.

Michael Dell wants to take Dell private so the company can make drastic changes to its PC division. Shareholders have been reluctant to allow for drastic innovation changes for fear they would cannibalize the company’s predominant business practices. The biggest change could come in the form of the Dell Ophelia, a USB sized computer that plugs into the TV and allows users to operate various operating systems in the cloud.

A final timetable for the privatization deal has not been announced, and Reuters warns that hiccups in the deal could delay its final close date.

Do you think Dell going private is a smart move?