Agentless Backup is Not a Myth

Michael Dell may not cash out and do a leveraged buyout of the company that bears his name, but instead put his own money where his mouth has been and buy majority control the eponymous pride of Round Rock, Texas.

And, according to the latest reports, he could finalize the deal to take Dell private as soon as Monday.

This takes real commitment and a certain amount of gumption. MSD Capital, the personal investment arm of Dell, the man, reportedly has about $12bn in assets under management, and Dell has a 15.7 per cent stake in the company worth about $3.6bn. It is not clear if all of this is under the thumb of MSD Capital, but if most of it is not, then the Dell family can probably marshal enough cash and shares to take a majority stake in Dell, the company.

And that, apparently, is the plan.

Whether it has been the plan all along is less clear, but that would explain why Silver Lake Partners and Microsoft would be willing to kick in the extra billions to take Dell over in a buyout. This is not so much a leveraged buyout, then – as it originally appeared with Silver Lake and a bevy of bankers looking to take over the company – as it is a founder looking for a few key investors to help get control of his company out from under the unappreciative glare of Wall Street investors and the analysts who tell them what to think.

And with banks lining up a rumored $15bn in financing, it looks like Dell and MSD Capital might be borrowing money against assets to buy Dell shares from investors rather than liquidating assets to generate the cash.

The interesting bit, of course, is that if Dell, the man, does succeed in taking the company private, we will all want to know what he'd do differently when he would be in control. And, of course, he wouldn't have to tell us anymore.

What is clear is that the more people talk about this leveraged buyout deal, the more expensive it gets. As El Reg goes to press on Friday shortly before the markets close, Dell shares are trading at $13.66, giving Dell a market capitalization of $23bn. That's more than $4bn higher than Dell was worth two weeks ago when rumors of the buyout first hit, and at the top-end of $16 per share, Dell would be worth $27.2bn.

That would give Dell shareholders a 44 per cent premium in just the past two weeks, and the question now is this: is that enough to close the deal? ®

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