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Dell buyout would free execs from shareholder pressure, distraction

Sharon Gaudin | Jan. 16, 2013
With buyout talks gaining steam, analysts say Dell Inc. could be looking to free itself from quarterly distractions and shareholder pressures.

At 12:20 p.m. today, the company's stock was at $12.55 a share.

That kind of increase could be a problem, according to Olds.

"The biggest hurdle to making a leveraged buyout happen is Dell's rising stock price," he explained. "Already, there's speculation that major shareholders won't accept a deal for anything less than $15 per share. The stock is suddenly worth so much more just because of the rumor that Dell might go private. That's a huge change based on a rumor and a signal that this deal could be much more expensive than anticipated."

But if a deal does take place, Olds doesn't think it will hurt the company, the market or users.

"...There isn't much here that will impact Dell's products or services in the short to medium term," he said. "Dell isn't going away and there's no risk to consumers looking to buy a Dell product."

 

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