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Michael faces competition; Icahn & Blackstone in Dell buyout fray

Dell Inc is getting closer to a buyout after Blackstone Group and billionaire investor Carl C Icahn sent preliminary deal proposals, signalling a possible three-way competition for controlling the computer maker. Private equity firm Blackstone Group submitted an offer ahead of the expiration of a 'go-shop' stage on Saturday that allowed Dell to look at new options.

Blackstone has not so far put together bank financing but it has worked out some arrangement with potential lenders, he added. Billionaire investor Carl Icahn, who has a minority stake in Dell and is against the offer by founder Michael Dell and his private equity partner Silver Lake, also made an offer, according to the Wall Street Journal.

Particulars of the competing offers were not straight away known, but any rival bid would have to prove sweeter than the $13.65-per-share offer of Dell's founder and Silver Lake.

The company's directors have spent around one and half months trying to locate alternatives to a $24.4 billion offer from Michael Dell and the private equity firm.

Hewlett-Packard and Lenovo, who were among those asked to take part in the 'go-shop' period, however have been discounted as possible buyers. Sources said they were only taking a look at Dell's financials. A spokesman for Dell declined to comment.

Signs of potential rival bidders for Dell could help raise the price of the offer by Dell and his PE partner that shareholders have complained of being low. Southeastern Asset Management and T Rowe Price, two of the company's biggest investors, have said they will not accept the $13.65-per-share offer by the computer maker's founder.

Icahn has reportedly told the company's special board committee that he opposed the transaction. He agreed to participate in the evaluating process last week. The special committee, consisting of four independent Dell directors, is being advised by independent financial advisors,
JP Morgan and Evercore Partners, and an independent legal advisor, Debevoise & Plimpton LLP. Shares of Dell closed unchanged at $14.14 on Friday.

If Blackstone is successful in unseating the existing buyout deal, Dell may lose his position as CEO. Blackstone is also working on a deal that may not require Dell to contribute his shares in the company into the buyout, sources said.

Under the Silver Lake deal, Dell's board got the founder to give his consent to a condition that reverses his capability to beat a buyout transaction he doesn't support.Dell Inc on 5 February announced that it has signed a definitive merger agreement under which Michael Dell in partnership with global technology investment firm Silver Lake, would acquire Dell.
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