Lynch mob of bankers say they'll stump up cash to take Dell private
Financing deal not a problem for four top banks, whisper sources
Dell is a little bit closer to selling itself off, with at least four major banks willing to put up the money, according to knowledgeable sources.
The rumour, reported by Reuters, was enough to send shares in the PC firm up over 7 per cent in New York trading yesterday.
Dell is supposedly looking for private equity buyers to take it away from the vagaries of the public markets while it attempts to move into corporate technology - since PCs are looking like a less than solid revenue stream these days.
Bank of America Merrill Lynch, Credit Suisse, Barclays and the Royal Bank of Canada are all willing to finance any buyout of the firm, according to the loquacious yet anonymous sources, who also speculated that a deal could be done soon, but they're not sure.
Silver Lake Partners is the buyout firm in the potential hot seat, willing to spend around $14 a share on Dell with the help of other investors, CNBC reported. The deal could also involve investment from titular CEO Michael Dell, who already owns 14 per cent of the company.
But analysts are unsure if the company can get private investors to believe it can make them some money.
Investment research firm Sanford Bernstein's senior analyst Tony Sacconaghi said on CNBC show Fast Money that any deal for Dell was pretty unlikely.
"I ultimately think when push comes to shove, it will not happen," he said. "It's a very large leveraged buyout. This will be one of the largest leveraged buyouts of all time, with an acquisition cost well over $20bn.
"Against that backdrop, you have a pretty risky environment in the sense that the PC marketplace is going through a lot of change right now." ®