Dell Inc. (NASDAQ:DELL) shares rose more than 12 percent in less than an hour after reports that the company could go private. The stock rose so quickly that trading on it was halted temporarily this afternoon. The news comes a little over a month after Goldman Sachs analysts suddenly shifted their view of the company’s stock from Sell to Buy, saying that the company’s position created an opportunity for a leveraged buyout.
Citing two anonymous sources, Bloomberg reports that Dell Inc. (NASDAQ:DELL) is in negotiations for a buyout by private-equity firms, which would take the company private. At this point the talks are in the very early stages, and the deal may not go through because the firms might not be able to arrange the financing. Bloomberg’s sources reportedly told it that “several large banks” were contacted in reference to financing the deal.
Founder and CEO Michael Dell has said in the past that he was open to his company becoming a private company again. Dell himself owns almost 16 percent of his company, which makes it a bit easier to arrange equity financing.
Dell Inc. (NASDAQ:DELL) has been struggling in recent years as more and more businesses and consumers switch to mobile computing devices. The company has attempted to diversify its product line, although some of its efforts haven’t gone too well. Dell’s attempt at a Windows smartphone was cancelled after just one sales cycle.
However the company seems ripe for a takeover because of its cash position. Dell’s most recent quarter indicated $13.7 billion in revenue with $475 million net income and about $11 billion in cash. According to The Next Web, these numbers indicate a valuation of around $10 billion for the company.
Shares of Dell Inc. (NASDAQ:DELL) have risen over 20 percent in just two weeks.