Dell Inc, in a statement, warned its shareholders of the risks involved in remaining as a publicly traded company. This includes the debt burden and declining profit forecasts for the company.
This clearly is a response to the proposals of the Blackstone Group LP and investor Carl Icahn as 'fraught with risk'. The statement was made through a 274 page preliminary proxy statement on how the US$24.4 billion leveraged buyout proposal from Michael Dell, founder and CEO and Silver Lake Partners, a private equity firm was drafted and formulated. It also reiterated that the proposal put forth was the best of all the available alternatives to be decided upon.
The crux of the differences between the offer of Icahn and Blackstone and Silver Lake offers is the decision to keep shares of the third largest PC maker in the world traded in bourses. The Silver Lake-Michael Dell offer would fully privatize the company while both Blackstone and Icahn offers had more than half of the shares of the company remain publicly traded.
Dell's final word, without passing judgement on the other bids, is that leveraged capitalization was a risky proposition if the company remains publicly traded.
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