The special committee said it will continue discussions with Blackstone and Icahn, however. "We intend to work diligently with both of them to assist them in their respective due diligence reviews of the company and to seek definitive proposals that would constitute a superior proposal to the current Silver Lake and Michael Dell transaction," the committee said. "Michael Dell has confirmed his willingness to explore participating in alternative acquisition proposals. However, there can be no assurance that either non-binding alternative acquisition proposal will ultimately lead to a superior proposal. "
Blackstone's offer would give shareholders the choice of receiving either all cash or stock, with each being valued "in excess of $14.25 per share," according to a Dell statement. Dell would also continue to be traded on the NASDAQ exchange. Icahn's group would acquire up to 58 percent of Dell's outstanding shares, offering $15 per share up to an aggregate of more than $15 billion in cash. Icahn Enterprises now owns 80 million shares of Dell.
Michael Dell first approached the Dell board with the idea of going private last August, about two months after Southeastern approached him, according to Dell's latest SEC filing. The special committee was formed to analyze and oversee the plan, and examined proposals by Silver Lake, investment firm KKR -- which may have included Southeastern in its plan -- and a third investment firm unnamed in the filing.
KKR and the third investment firm dropped out. KKR's "decision was driven largely by the fact that its investment committee was not able to get comfortable with the risks to the company associated with the uncertain PC market, and the concerns of industry analysts," according to Dell's filing.
Southeastern itself put in a counterbid to Silver Lake, but Silver Lake won out when Michael Dell agreed to roll his own shares into the deal at a discounted $13.26 per share, allowing Silver Lake to come up with a bid acceptable to the special committee, according to the filing.
The Dell filing outlined the poor financial picture that the special committee faced as it deliberated whether to agree to take the company private. For example, in August "primarily as a result of continued weakness" in the EUC (end-user computing) business, the company reported revenue for the second quarter of fiscal year 2013 of $14.5 billion, the filing noted. Dell's revenue for this quarter was approximately $300 million less than the amount projected by management for the quarter, and about $800 million less than a prior forecast management had made.
"The Company lowered its fiscal year 2013 earnings per share guidance from $2.13 to $1.70 and attributed the lowered outlook to the uncertain economic environment, competitive dynamics and the decline in demand in the EUC business," the filing noted.