It seems as though insiders and those familiar with the matter have had reality show like loose lips, for the market seemed to be expecting a deal. The current discount however represents a plethora of risks to the situation. Many sources are disappointed with the proposed price, so their vote could be a risk.
The upside includes the potential for the go-shop period to play out. The go-shop process provides an opportunity to determine if there are alternatives offers superior to the one presented from Mr. Dell and Silver Lake for the firm out there. This period of time is 45 days.
The transaction is valued at approximately $24 B. $13.65 represents a premium of 25 percent over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first released; a premium of approximately 35 percent over Dell’s enterprise value as of Jan. 11, 2013.
Mr. Dell, who owns approximately 14 percent of Dell’s common shares, will continue to lead the company as Chairman and Chief Executive Officer.
