Silver Lake Partners is one of a small group of private-equity firms speaking with Michael Dell about buying his namesake firm, The Post has learned.
“I’d be shocked if TPG Capital is not also in the mix,” the source said, following a report that the PC maker, which lost one-third of its value last year amid slumping sales, was in buyout talks.
“The deal is real,” a Wall Street banker with knowledge of the situation said, declining to give further details.
Private-equity firms could put down $1 billion each in the deal, sources said, and that perhaps only two or three were needed to finance a nearly $20 billion buyout.
Trading of Dell’s shares were halted yesterday after Bloomberg broke news of the preliminary talks.
Dell’s shares rose yesterday 13 percent, to $12.29. The stock is now more than 20 percent higher than what it was heading into December, when talks may have already been under way.
For some time, Michael Dell — who controls his company’s voting stock — has been intrigued about a take-private transaction, said one source.
“This company should be leveraged, run for cash flows and not for growth,” the source said.
Amid the buyout talks, questions were raised yesterday about whether a buyer would have to pay 35 percent taxes on Dell’s $14.2 billion of cash stashed overseas.
That is “not a complete impediment,” the source said.
Some of the cash could be left overseas and used as collateral to borrow the roughly $7 billion needed to fund a buyout.
Private-equity firms often seek companies that they can leverage and that will have enough cash flows to then reduce debt without making heavy investments.
Silver Lake and TPG declined comment. Dell did not return calls.