Dell buy out on Monday

Michael Dell’s much talked about buy-out of his own company will happen on Monday, according to industry whispers.

A number of news sources claim  that Dell is nearing an agreement to sell itself to a buyout consortium led by its founder and chief executive Michael Dell and private equity firm Silver Lake Partners.

Michael Dell will take majority ownership of the world’s third largest PC maker, which currently has a market value of $23 billion, while Silver Lake and Microsoft would become minority investors.

Of course, no one has mentioned how much of Dell’s personal fortune will be used to buy his company back from shareholders. It is fairly likely to be the largest leveraged buyout since levers were first invented by Archimedes.

Apparently there is still some shouting to do over the weekend and it is possible that the timetable could still slip.

Dell’s investment group has secured up to $15 billion of debt financing to take Dell private from four investment banks who are named and shamed as Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital.

Barclays is advising Silver Lake on the transaction, along with Perella Weinberg Partners. JPMorgan Chase is advising Dell.

What is expected to happen is that Michael Dell will contribute his stake of 16 percent in the company toward gaining majority ownership.

It is not really clear what Dell will get out of the whole plan. Some have suggested that going private would allow Dell to carry out a difficult makeover where the great unwashed can’t see, mock, and blow raspberries.