Michael Dell, Silver Lake to buy Dell for USD 24.4 billion

Dell's board has approved a definitive agreement under which it will be fully acquired by Michael Dell, its founder, chairman and CEO, in partnership with global technology investment firm Silver Lake. Under the terms of the agreement, Dell stockholders will receive USD 13.65 in cash for each share of Dell common stock they hold. The transaction is valued at approximately USD 24.4 billion and is subject to other customary conditions, including receipt of required regulatory approvals and Dell stockholder approvals. The operation is expected to close before the end of the second quarter of Dell's fiscal year 2014.

The price represents a premium of 25 percent over Dell's closing share price of USD 10.88 on 11 January, the last trading day before rumours of a possible going-private transaction were first published, a premium of about 35 percent over Dell's enterprise value as of 11 January and a premium of 37 percent over the average closing share price during the previous 90 days. The buyers will acquire for cash all of the outstanding shares of Dell not held by Mr Dell and certain other members of the management.

Following completion of the transaction, Mr Dell, who owns approximately 14 percent of Dell's common shares, will continue to lead the company as chairman and CEO and will maintain a "significant" equity investment. The transaction will be financed through a combination of cash and equity contributed by Mr Dell, cash funded by investment funds affiliated with Silver Lake, a cash investment by an investment fund affiliated with MSDC Management, a USD 2 billion loan from Microsoft, rollover from existing debt, as well as debt financing that has been committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets and cash on hand. There is no financing condition.