(Story updated to include Sterne Agee comments and closing share prices.)
NEW YORK (
, the No. 3 PC maker, is in talks to go private, according to reports from
, citing two unnamed sources.
Dell is in discussions with multiple private equity buyers, sources told
. Still, the talks are preliminary and could fall apart.
Sterne Agee analyst Shaw Wu wrote in a Monday client note that a potential takeover is possible but low in likelihood, given the financing needed to buy Dell, which currently has a market value in excess of $21 billion, and the PC maker's challenging competition. "[A] deal of this size would likely involve multiple PE firms, and we estimate the majority of its businesses (70%) remain under structural and secular pressure," Wu wrote in the Monday client note.
Dell is facing competitive threats from tablet devices made by
(AAPL - Get Report)
(GOOG - Get Report)
. Meanwhile, the Round Rock, Texas-based PC maker is losing PC market share to competitors
(HPQ - Get Report)
, according to a Monday analysis from
RBC Capital Markets
Sterne Agee analysts wrote earlier in January that after a 10% PC-market decline in 2012,
(MSFT - Get Report)
launch of Windows 8 software and hardware may help the PC industry to low-single-digit growth in 2013.
Prior to the
report, Dell had been active in a turnaround strategy that centers on becoming more competitive in software and technological services. Such a turnaround is in the mold of
transition to a software and services giant. HP, another struggling PC maker, is trying to embark on a similar change effort.
Dell ended 2012 as one of the most acquisitive tech companies of the year, buying up
for $2.4 billion
. At the early part of the year, the Michael Dell founded company cut a flurry of deals for IT services specialists such as SonicWall, Wyse Technology and AppAssure Software.
Earlier in January, Bernstein Research analyst Toni Sacconaghi gave the PC-maker a sum of the parts value of $12 a share. Sacconaghi, noted that both Dell and HP being valued at their breakup value by some investors given a bleak outlook for a PC market turnaround. HP's individual assets, the analyst calculated, are worth $29 a share.
On Jan. 7, Dell said its head of M&A Dave Johnson left the company for private equity giant
Founder Michael Dell owns 15.74% of the company's shares, according to
Securities and Exchange Filings
as of May 2012. In 2010, Dell said at a Bernstein investor conference he might consider taking the company private, but did not elaborate.
In Monday trading, Dell shares traded nearly 13% higher to $12.29. The company's stock has shed over 20% in the past 12 months, including Monday share price gains.
-- Written by Antoine Gara in New York