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Blackstone has pulled out of a bid for PC maker Dell, blaming collapsing computer sales and concerns over the finances of the company.
Describing the drop in PC sales as “unprecedented”, it said concerns about the future of the market and Dell’s ability to adapt to the changing market.
Recent facts from the two major IT market analysts Gartner and IDC show PC sales collapsed during the first three months of this year.
IDC said they were the lowest on confirmation. It started collecting market data in 1994.
Both billionaire investor Carl Icahn and a consortium led by Michael Dell – who sparked the buyout race – are still bidding to take over the company.
Dell’s bid is understood to be worth $24.4bn. But, it has drawn evaluation from some existing board members that believe the bid is too low.
Carl Ichan is best known as the disruptive board member of Yahoo that forced co-founder Jerry Yang out. That go paved the way for Microsoft to buy Yahoo.
Blackstone stressed that it still views Dell as “a leading global company with strong market positions”. But, it also said that the two main points of interest mean it would not be continuing with its bid.
Since the firms started bidding for the company, Dell has revised its operating income projections for the current year down from $3.7bn to $3bn.
A recent study by consulting firm Asymco “Escaping PCs” found that Dell still makes the largest chunk of profits from the Windows PC market.
Its 13 per cent share of the profit of the overall PC market (Apple accounts for 45 per cent, as reported on Thursday), is nearly twice its nearest rival HP. It is also as much as HP and Lenovo combined.