Counterparties: Dude, you’re getting a bidding war
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Dell might not be Michael Dellâ€™s much longer. Dell has teamed with private-equity firm Silver Lake to buy the company he founded for $13.65 per share, or $24.4 billion — but now Blackstone and Carl Icahn have each submitted rival bids. Those bids are both worth slightly less than $15 a share, the WSJ reports. If either is successful, Michael Dell is likely to find himself far less powerful at his own company — or even out of a job entirely.
The WSJâ€™s David Benoit has a great side-by-side comparison of the three competing offers, and breaks out six different scenarios for a deal to be done.
Under a â€śgo-shopâ€ť provision in the initial deal, Dellâ€™s board was allowed to freely seek competing offers; in fact, the board owes a fiduciary duty to Dell shareholders to get the best deal possible. Steven Davidoff notes the Dell board can only keep talking to the rival bidders if they â€śconclude after consultation with outside counsel and its financial advisers that one offer, or both, could reasonably be expected to result in a superior proposalâ€ť.
According to Reutersâ€™ Jessica Toonkel and Greg Roumeliotis, Dellâ€™s board thinks the new bids might indeed be superior to Michael Dellâ€™s. Itâ€™s unclear whether leaking that view to the media was intended to provoke an improved bid from the founder.
When it comes to putting a price on Dell, Roben Farzad points out one wild card: the companyâ€™s 3,449 patents (with another 1,660 pending). Those patents are surely worth something, but as patent expert David Pratt says, their value â€śis often misunderstood and difficult to priceâ€ť. Which is surely catnip to the hundreds of bankers and lawyers advising three private equity firms, a corporate board, and Michael Dell himself. – Ben Walsh
On to todayâ€™s links:
Why the Cyprus crisis isn’t over yet – Felix
â€śI call this Cyprus leaving the euro but keeping the word â€śeuroâ€ť to save faceâ€ť – Tyler Cowen
After Cyprus, the “unrestricted movement of capital is looking more and more like a failed experiment” – Krugman
“Do capital controls make a mockery of the concept of a currency union? Yes, obviously” – Joseph Coterill
The Dutch financial minister commits a Kinsley gaffe about Cyprus – Tim Fernholz
“As soon as the money leaves, the people who go to restaurants, buy cars and buy property leave too” – FT