Will Dell Be Privatized Again?

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In its nearly 40 years of history, dell.us has experienced the formation of many companies, from the founder founded in the dormitory to the listed company, to the personal computer giant, to the private company, and then to the listed company. So will Dell be privatized again?

Zhitong finance understands that Bernstein analyst Toni sacconaghi raised this issue on Thursday. Sacconaghi said that recent activities showed that Dell founder Michael dell may bring his namesake company back to the private world, but if Dell withdraws from the public market again, it needs the joint action of a series of special events.

Sacconaghi said in a research report: "of course, the real question is whether Dell is willing to privatize again at any cost He holds more than 50% of Dell's shares, and Dell will buy back 4% of its shares in the first quarter of this year. Investors have been asking whether Michael Dell will consider privatizing Dell again, or whether the company will continue to carry out large-scale share buybacks in the next few years, so as to effectively realize privatization. "

Sacconaghi estimates that Michael Dell and Silver Lake capital may need a total of US $17billion to US $22billion to provide a 10% to 40% premium to completely acquire the shares of all current shareholders of Dell technology. Sacconaghi said that as part of this assumption, Michael Dell could use the proceeds from the sale of VMware to avgo.us to help repay Dell's incremental debt of about $10billion to $15billion in the next two to three years.

Another option is that Michael Dell or Silver Lake capital can buy back the stocks they do not own on a larger scale. Sacconaghi said that under this possibility, the company will need to achieve real privatization in fy2026.

In addition, there is another option to combine the two options. Through an active combination of stock repurchase and debt financing, Dell may realize privatization in the next one to two years.

However, sacconaghi said that even with these options, Michael Dell is still unlikely to privatize the company, mainly because it requires a lot of work to make this move a reality.

Sacconaghi said that Dell has been privatized and listed again in less than 10 years, which may be in contrast to the privatization of the company in the foreseeable future. It also gives people a feeling of "experienced and done".

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