Timeline: The long path to a Dell buyout
Dell Inc founder Michael Dell's efforts to take the PC company private began last summer with an idea pitched by its top institutional shareholder, Southeastern Asset Management.
Here is a timeline of the discussions as disclosed on Friday in Dell's preliminary proxy statement:
June 15, 2012 -- Southeastern Asset Management, which owns 146.5 million shares or about 8.4 percent of Dell, contacts CEO Michael Dell to suggest "a going private transaction" and expresses the fund's interest in participating in it.
July 17 -- Michael Dell meets a representative of private equity firm Silver Lake Partners at a conference and they set up discussions in August. In these talks, Silver Lake suggests to Dell's founder he should take the company private.
August 11, 13 -- Michael Dell meets with a representative of another private equity firm, identified in the proxy only as "Sponsor A," to ask what it thought of such a transaction. Sources told Reuters Sponsor A is private equity firm KKR & Co LP. KKR declined to comment.
August 14 -- Michael Dell informs board member and lead independent director Alex Mandl that he is exploring a buyout but says he has made no decision.
August 17 -- The board has a teleconference during which Michael Dell briefs them on the take-private idea and discussions surrounding it. The board decides to consider a potential transaction and other strategic alternatives.
August 20 -- The board forms a special committee consisting of Mandl, former co-director of Goldman Sachs' Americas equity research unit Laura Conigliaro, Marathon Oil Chief Financial Officer Janet Clark and consulting firm Duberstein Group CEO Kenneth Duberstein. Mandl is subsequently appointed chairman of the special committee.
August 21 -- Dell reports weak second fiscal quarter results. Revenue of $14.5 billion was about $300 million less than what management had expected. The company lowers fiscal 2013 outlook.
August 24 to 29 -- Mandl holds discussions with investment bankers JPMorgan Chase & Co and Goldman Sachs Group Inc to select a financial advisor. JPMorgan is retained.
September 14 -- JPMorgan tells the special committee it has identified other financial sponsors as potential buyers but notes that Silver Lake and KKR are best placed as each could complete a transaction with significant committed equity.
October 23 -- Silver Lake and KKR submit preliminary proposals to acquire Dell. Silver Lake's purchase price is between $11.22 and $12.16 per share, and KKR's purchase price is between $12 and $13 per share. Both assume Michael Dell would participate in the deal. KKR also assumes Southeastern would participate.
October 27 - The special committee discusses with Dell Chief Financial Officer Brian Gladden potential strategic alternatives such as returning capital to shareholders through a leveraged recapitalization, accelerating the company's current plan, a transformative acquisition and separating certain businesses.
November 2 -- JPMorgan informs Silver Lake and KKR the special committee is not happy with the price ranges.
November 12 -- Dell hires Boston Consulting Group to review strategic alternatives.
Dec 3 -- KKR withdraws from the process, mainly because it is not comfortable with the risks associated with Dell.
December 4 -- Silver Lake submits an updated proposal to acquire Dell for $12.70 per share.
December 7 -- Mandl invites another firm, identified in the proxy only as "Sponsor B," to consider making a proposal. A source told Reuters Sponsor B is private equity firm TPG Capital LP. TPG did not respond to a request for comment.
December 10 -- Mandl informs Silver Lake its offer price is too low. Silver Lake seeks permission to involve Microsoft Corp, from which it intended to seek financing.
December 14-16 -- The company enters into confidentiality agreements with debt financing sources of Silver Lake: RBC Capital Markets, Credit Suisse Securities, Barclays Capital, and Bank of America Merrill Lynch.
December 17 -- Michael Dell meets with senior representatives of TPG to discuss a potential proposal.
December 23 -- TPG informs it is withdrawing from the process, primarily due to "risks and uncertainties in the PC business."
January 16, 2013 -- Silver Lake submits another proposal to acquire Dell for $12.90 per share.
January 19 -- Mandl tells Michael Dell the special committee is willing to support a transaction at a price of $13.75 per share. Michael Dell then discusses it with Silver Lake, which later proposes a price of $13.25 per share.
January 20 -- Silver Lake informs Dell it is willing to increase its offer price to $13.50 per share.
January 24 -- Silver Lake increases its offer to $13.60 per share.
January 24 -- A party identified as "Strategic Party A" expresses interest in purchasing Dell's financial business for about $3.5 billion to $4 billion. Blackstone Group LP also expresses interest in exploring a transaction. It could not be confirmed whether Strategic Party A IS General Electric Co, which sources previously said had been approached by Blackstone. GE has previously declined comment.
January 29 -- Southeastern informs special committee it would oppose any deal in the range of $14 or $15 per share that did not provide existing large stockholders with an opportunity to participate.
Michael Dell and Silver Lake say they are not interested in pursuing a deal in which any public stockholders would retain an interest.
February 3 -- Silver Lake submits a revised proposal, offering $13.60 per share if the company continues paying its regular dividend, or $13.75 per share if the company stops paying dividends.
February 4 -- Silver Lake ups its offer to $13.65 per share, with the Dell allowed to carry on paying its regular dividend.
Special committee recommends accepting Silver Lake's proposal.
February 5 -- A deal with Silver Lake is announced and a 45-day period starts to uncover other offers. Dell contacts 67 parties, including 19 strategic parties, 18 financial sponsors and 30 others such as sovereign wealth funds. Unsolicited inquiries are also received from four parties, including two strategic and two financial sponsors.
March 5 -- Activist investor Carl Icahn sends a letter to Dell's board stating he is a substantial holder of shares. Icahn later reveals he has $1 billion worth of Dell shares.
March 21 -- Dell advisor Evercore receives an indication of interest from Strategic Party A for a proposed acquisition of Dell's finance business.
March 22 -- Blackstone and Icahn Enterprises send proposals to the special committee. Blackstone, which teamed up with Francisco and Insight Venture partners, offers in excess of $14.25 per share for the whole company, while Icahn offers about $15 per share for 58 percent. Under both proposals, Dell would remain a public company.
March 25 -- Dell releases 274-page preliminary proxy statement on its buyout negotiations.
Sources: Dell's proxy statement, Reuters
(Reporting By Poornima Gupta in San Francisco and Greg Roumeliotis in New York)