World Business

Dell CEO says considered taking company private

(Agencies)
Updated: 2010-06-04 11:45

SAN FRANCISCO: Dell Inc's Michael Dell revealed on Thursday he had once considered taking the company he founded private, sending shares in the No 3 PC maker surging as much as 6.4 percent.

Michael Dell, CEO of Dell Inc. [File photo / Agencies]

The comment caused the stock to spike a half-hour before the market's close on speculation about a buyout premium, but analysts said many pieces would have to fall in place for such a deal to happen.

Kaufman Bros analyst Shaw Wu said Dell going private was not out of the question, but said it would take plenty of outside financing and would not change the company's structural problems or necessarily improve its ability to compete with the likes of Hewlett-Packard Co and Apple Inc.

"It's possible, but it would require a lot of funding. They would probably need private equity and some other financing," he said.

Many of Dell's investors remain focused on current concerns, such as an ongoing effort to turn around the once-dominant PC maker by focusing on higher-margin technology services rather than PC sales, and staking out a footprint in a crucial wireless device market.

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Dell's CEO said that transformation is incomplete.

In response to a question at the Sanford C. Bernstein investor conference, Dell said he has considered taking Dell private but would not comment when asked what would make him think about the possibility more seriously.

He also said he was committed to running the company.

A Dell spokesman also declined to comment further.

According to data compiled by Thomson Reuters, Dell is the largest single shareholder in his namesake company, with an 11.6 percent stake.