SAN FRANCISCO (Reuters) - Dell Inc shares slid to a two-month low on Friday after private equity firm Blackstone Group LP withdrew its buyout bid, blaming a crumbling PC market for reduced financial forecasts at the world's No. 3 PC maker.
Its withdrawal eases the way for founder Michael Dell and Silver Lake to go ahead with a deal to buy and take it private for $13.65 a share, which major shareholders have complained severely undervalues the company.
By early afternoon, Dell's stock was down 3.7 percent at $13.43.
Blackstone initially offered $14.25 a share. Activist investor Carl Icahn, who has taken a significant stake in the company, remains in the running and has proposed $15 per share for 58 percent of Dell.
It is unclear how Icahn or major investors, including top independent shareholder Southeastern Asset Management, will respond to news of Blackstone's pullout.
Silver Lake and Michael Dell are now unlikely to raise their offer price, Wells Fargo analyst Maynard Um said, a possibility much debated since Blackstone and Icahn arrived on the scene.
The billionaire wants to take private the company he founded in 1984 in a college dorm-room, hoping to transform it into a provider of enterprise computing services away from public investor scrutiny. But shareholders complain such a deal deprives them of a chance to share in the future benefits of a successful overhaul.
"By being private, Dell can make many more strategic decisions, particularly around pricing to grow and upsell into its customer base," Um wrote on Friday.
"Being private also takes the customer discussion away from the operations of the company ... and will allow the company to focus on its products and solutions."
Personal computer sales plunged 14 percent in the first three months of the year, the biggest decline on record, as tablets continued to gain in popularity and buyers appeared to avoid Microsoft Corp's new Windows 8 system, according to leading technology tracking firm IDC.
Dell was hailed as a model of production innovation as recently as the early 2000s, pioneering online ordering of custom-configured PCs and working closely with Asian component suppliers and manufacturers to assure rock-bottom costs.
As of 2013's first quarter, its share of the global PC market had slipped to 11.8 percent, behind Hewlett Packard Co and China's Lenovo Group Ltd.
(Reporting by Edwin Chan. Editing by Andre Grenon)
Source: http://news.yahoo.com/dell-shares-two-month-low-blackstone-pulls-175403901--sector.html
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