The New York Post is reporting that Dell is finding it more difficult than it expected to raise the initial round of funding for its US$67 billion (AU$94 billion) acquisition of storage giant EMC.
The Post reported Thursday US time that Dell, which needs to raise US$45 billion to finance the acquisition of EMC, had expected to price the first US$10 billion of debt on Wednesday US time. However, the group of banks working on the deal, which is being led by JPMorgan, needs another 10 days to arrange the loan, The Post said.
The New York Post, citing an unnamed source, said the loans have proved harder to sell than expected because of tightening credit markets.
Furthermore, Dell has run into a possible delay in its plans to sell its Perot Systems professional services business as one of the leading suitors for France-based Atos, has dropped out of the bidding, the Post reported, again citing an unnamed source. That leaves India-based Tata and Japan-based NTT Data as the two remaining suitors.
“The EMC transaction is on schedule under the original timetable and the original terms,” said a Dell spokesperson in an email to CRN USA.
Dell in October said it plans to purchase EMC in a deal worth US$67 billion. The deal is expected to close sometime this year.
Part of the deal includes paying EMC shareholders US$24.05 per share in cash along with an as-yet unspecified amount of tracking stock in VMware, 80-plus percent of which is currently owned by EMC. However, EMC share prices have lost well over a quarter of their value since the planned acquisition was announced.
Even so, Dell and EMC are continuing forward as if the acquisition is a done deal. Michael Dell will be a keynote speaker at this year's EMC World in May. And David Goulden, CEO of EMC's Information Infrastructure business, this week told EMC employees the acquisition will give EMC the opportunity to take a long view of the storage market.
Steven Burke contributed to this story.