Term Sheet

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Of course Michael Dell wants control

January 30, 2013: 11:46 AM ET

michael dell

Michael Dell was never looking to be a small fish in his own pond.

FORTUNE -- Bloomberg is reporting that Michael Dell is seeking majority control of Dell Inc. (DELL), the PC maker that is in talks to be taken private by Silver Lake Partners and Microsoft (MSFT). In other news, Kobe Bryant still wants to take the last shot in a tied game.

Seriously, did anyone ever think different?

For starters, it was always assumed that Michael Dell would roll over his existing 15.74% position. Next, we knew that the total equity check (excluding Dell's shares) would need to be around $5 billion. Even if Microsoft and Silver Lake each pumped in $2 billion -- something I don't believe Silver Lake can actually do, save for possibly utilizing some fund recycling provisions  -- that would still leave a $1 billion gap.

MORE: Can private equity solve Dell's dilemma?

That's where Michael Dell would come in -- meaning that he would contribute more than $4 billion in value (i.e., more than Microsoft and Silver Lake combined).

From a more qualitative perspective, Michael Dell has never suggested a willingness to give up the reins. He could have remained Dell's chairman and CEO following a buyout, but his job security would have been subject to Silver Lake's continued approval. Or that of whoever Silver Lake sold Dell to down the line. That just isn't happening.

MORE: Michael Dell's grand plan

In fact, sources tell me that Michael Dell's insistence on eternal control was one reason why a number of private equity firms didn't look seriously at the opportunity. Not because they didn't want Michael Dell involved -- but because they wanted the option of dumping him if they someday changed their mind.

None of this is a knock on Michael Dell. He founded Dell, is its largest shareholder and believes he's the right man to help it adapt to a PC-light world. Instead, it's a knock on anyone who thought he'd voluntarily let someone else determine his fate, or that of his company.

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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