Higher Bid for Dell (DELL) Largely Seen Happening
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Price: $399.02 +1.93%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 1.2%
EPS Growth %: +100.0%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 1.2%
EPS Growth %: +100.0%
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Dell, Inc. (Nasdaq: DELL) is gaining early Friday following reports that there might be a little more upside in store before any sort of "go private" deal is finalized.
According to Bloomberg-compiled data, Michael Dell and Silver Lake could pay $15 per share and still take the PC giant under for the lowest multiple among its peers, about 5.4 times profit.
With shares recently closing about 4.2 percent above the current proposal, investors and traders are betting on a bit more out of Dell. Activist investor Carl Icahn agrees, with recent reports having him mull a possible $15-per-share tender offer for the stock.
Icahn is also backed by two of Dell's largest shareholders: Southeastern Asset Management and T. Rowe Price. Both think the current $13.65 per share bid undervalues the company. One Oscar Gruss analyst thinks a range of $14.65 to $14.90 could "get the deal done," with an additional $1.75 billion to $2.2 billion of debt being "manageable." Othre firms seeing $15 per share include Jefferies, Mizuho, Sterne Agee, and GRI Group.
One analyst from Edward Jones disagrees. Although a higher offer could happen, he believes that Silver Lake did a lot of foot work on Dell and given recent challenges in the PC industry, really believes that the company's intrinsic value is under $14 per share.
Hewlett-Packard (NYSE: HPW) and Lenovo are unlikely to place a bid.
Shares of Dell are up 0.5 percent Friday.
According to Bloomberg-compiled data, Michael Dell and Silver Lake could pay $15 per share and still take the PC giant under for the lowest multiple among its peers, about 5.4 times profit.
With shares recently closing about 4.2 percent above the current proposal, investors and traders are betting on a bit more out of Dell. Activist investor Carl Icahn agrees, with recent reports having him mull a possible $15-per-share tender offer for the stock.
Icahn is also backed by two of Dell's largest shareholders: Southeastern Asset Management and T. Rowe Price. Both think the current $13.65 per share bid undervalues the company. One Oscar Gruss analyst thinks a range of $14.65 to $14.90 could "get the deal done," with an additional $1.75 billion to $2.2 billion of debt being "manageable." Othre firms seeing $15 per share include Jefferies, Mizuho, Sterne Agee, and GRI Group.
One analyst from Edward Jones disagrees. Although a higher offer could happen, he believes that Silver Lake did a lot of foot work on Dell and given recent challenges in the PC industry, really believes that the company's intrinsic value is under $14 per share.
Hewlett-Packard (NYSE: HPW) and Lenovo are unlikely to place a bid.
Shares of Dell are up 0.5 percent Friday.
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Carl Icahn, Southeastern Asset Management, Jefferies & Co, Oscar Gruss, Sterne Agee, Michael Dell, Edward JonesSign up for StreetInsider Free!
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