"Given significant challenges facing the PC business (~50% of DELL's revenue) and a long transformation ahead, we would not anticipate the existing bidders (e.g., Silver Lake and CEO Michael Dell) to raise their offers meaningfully above competing offers, but wouldn't rule out an increase of their current bid to near the ~$15.00 range," Brian Marshall, an analyst at ISI Group wrote in a late Sunday note to clients.
"In our view, the emergence of new bidders helps limit downside to Dell stock in the near-term, but we see more long-term risk if no bid is ultimately approved due to deteriorating fundamentals in the PC business," added Marshall, who reiterated a neutral rating and noted minimal upside for those seeking to speculate on Dell's takeover process.
Competitor PC-makers Hewlett-Packard (HPQ) and Lenovo were reported to have studied Dell's books in its so-called 'go-shop' process, however neither firm is mentioned as a participant in any offer for the company.
Prior to Dell's disclosure Southeastern Asset Management had been reported as interested in making a bid for the company. Both Southeastern Asset Management and Icahn also supported a dividend recapitalization of Dell earlier in March, in a move they said would reflect the company's true value.Dell shares were trading higher by over 3% to $14.58 in Monday afternoon trading. The Round Rock, Tx-based company' shares have gained over 40% in 2013, amid takeover speculation. Shares, nevertheless, have fallen over 11% in the past 12 months, indicating strains the company faces in the deteriorating PC market. -- Written by Antoine Gara in New York Follow @antoinegara
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV