Blackstone Gets Cold Feet, Backs Out of Dell Bid
Citing un-named sources, Reuters reports that another factor leading up to Blackstone's withdrawal is a lower earnings forecast by Dell's bean counters. Dell's operating income dropped from $3.7 billion to $3 billion in the current fiscal year, and that's apparently too large of a discrepancy to ignore.
Image Source: Flickr (Axel Schwenke)
Blackstone's interest in Dell came about after Michael Dell constructed a $24.4 billion deal to take the company he founded private. Michael's deal would pay shareholders $13.65 per share as part of an all-cash offer if it goes through, whereas Blackstone's offer could have paid more than $14.25 per share while keeping part of the company public.
With Blackstone now out of the picture, Carl Icahn is one of the last few that stand in the way of Michael's takeover bid. Icahn's proposal would pay shareholders $15 per share for a 58 percent stake of Dell, though some reports suggest that he too is concerned about declining PC sales. On top of that, his offer was widely viewed as the weakest of the three.