And now it has come to one, as Blackstone Group LP has withdrawn from the race for the takeover of Dell Inc. This was confirmed by three individuals who spoke on condition of anonymity.
The withdrawal heralds the original bid of founder Michael Dell and private equity partner Silver Lake to proceed with the US$24.4 billion privatization deal for Dell. The Blackstone pull out comes after a month of initally challenging the deal made on the PC maker.
The reason for the withdrawal is the unprecedented drop in sales demand for personal computers, as much as 14% in current estimates. Another factor is the lowered earnings forecast by the management committee of Dell, showing a decrease of operating income to just US$3 billion from the previous estimate of US$3 billion.
Blackstone together with Carl Icahn had made preliminary offers to challenge the tabled deal made by Silver Lake. Icahn has purchased a significant amount of shares in the company and still continues to oppose the leveraged privatization offer of Dell and Silver Lake.
The Silver Lake deal though is not out of the woods yet as it still faces stiff review from Dell shareholders themselves, namely Southeastern Asset Management.
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