Dell Inc. founder Michael Dell will only consider backing a buyout by Blackstone Group if the private-equity firm guarantees he can remain as chief executive, according to a person familiar with the discussions.
In several recent meetings in Austin, Texas, with Chinh Chu and David Johnson -- the Blackstone executives overseeing the firm's bid -- Michael Dell said he would be more likely to support their proposal if he retained an influential role, a second person familiar with the talks said. Negotiations are ongoing, and the two sides may not reach an understanding.
Michael Dell said on Feb. 5 that he agreed to take his company private in a $24.4-billion transaction with Silver Lake Management. He's now using his 15.6 percent stake as leverage to preserve his leadership position as the company weighs competing offers from Blackstone and billionaire investor Carl Icahn, said one of the people, who asked not to be named because the talks are private.
If another bid is superior and bars him from future involvement in the company, CEO Dell would cash in his shares and walk away, leaving the buyer to replace about $4.5 billion in financing he could have contributed, one person said.
The offers from Blackstone and Icahn could end up being superior to the $13.65-a-share buyout planned by Michael Dell and Silver Lake, according to a statement last week from Dell.