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February 7, 2013

Dell to bring back $7.4bn of overseas cash for buyout

Earlier this week Dell agreed to a $24.4bn buyout deal.

By CBR Staff Writer

Dell is planning to bring back $7.4bn of cash and short-term investments it holds in foreign countries to the US to help finance its proposed buyout.

According to the Financial Times Dell’s plan was outlined in a regulatory filing saying the company will free up as much as $8.1bn in cash and short-term investments held by its subsidiaries, with the target amount being $7.4bn.

According to the regulatory filing, as of 2 November 2012, Dell had $11bn in cash and cash equivalents, "substantially all of which was held outside of the US."

Earlier this week, Dell announced that it is indeed going private, in a $24.4bn deal that will see founder Michael Dell become the largest individual shareholder with a stake of 14%.

The other big investor is private equity firm Silver Lake, with which Michael Dell will pay $13.65 per share in cash.

An investor in Dell has sued the company’s chief executive officer, Michael Dell and other company directors alleging that Dell’s board is shortchanging shareholders in the $24.4bn management-led takeover.

The deal is being financed by cash and equity from Michael Dell, MSD Capital investment firm, cash from Silver Lake, a $2bn loan from Microsoft and debt financing from Bank of America, Merrill Lynch, Barclay’s, Credit Suisse and RBC Capital Markets.

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