"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