Plans to take Dell private are 'advanced'

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Plans to take Dell private are 'advanced'

Talks to take PC vendor Dell private are in an advanced stage with at least four major banks lined up to provide financing, according to two sources

Dell shares rose 5.2 percent to $US12.92 in heavy afternoon trading yesterday on the NASDAQ.

Buyout firm Silver Lake Partners, which is leading the deal, tapped Credit Suisse, Bank of America Merrill Lynch, Barclays and RBC late last year to finance a potential deal, according to two sources with knowledge of the matter..

They said JPMorgan is advising Dell on a potential buyout of the $US19 billion company, which would be one of the largest deals since the global recession. 

Silver Lake is working with one of its major investors, known as limited partners, the sources said. Silver Lake's involvement was earlier reported by the Wall Street Journal.

The sources cautioned that the deal could come soon but that the situation is still fluid.

Dell, Bank of America, RBC, Barclays and Credit Suisse declined to comment. JP Morgan and Silver Lake did not immediately return calls seeking comment.

Dell, which has been in talks with private equity firms on a potential buyout, has had on and off discussions with the firms but talks heated up late last year, they said.

A deal involves equity investment from billionaire CEO Michael Dell, who owns 14 percent of the world's No. 3 PC maker. Dell, America's 22nd richest person according to Forbes, invests and manages his fortune through MSD Capital.

A buyout of Dell is challenging, mostly because of the size of the deal, according to analysts.

The odds of a buyout "are probably low, given its size and our expectation that it may require about $US4 billion in equity," Bernstein Research analyst Toni Sacconaghi said.

"We see the rationale for a Dell (leveraged buyout) as being largely opportunistic given low valuation and interest rates, as we don't see any obvious restructuring opportunities or unique exit strategy," he said.

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