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Dell Plans to Deal with Private Firms

Dell is in talks with private equity organizations on a possible takeover, confirming reports that sent shares in the world's No. 3 PC maker towering 13 percent to almost a eight-month high. The firms are now holding talks on a contract with billionaire Chief Executive and founder Michael Dell, who possesses about 14 percent of the company, according to one source with facts of the topic.

Talks had stepping forward for two to three months, heating up in last 2012, and a deal could be got to in six weeks, the Journal mentioned sources as saying. Dell, which has progressively yielded market share to Hewlett Packard and China's Lenovo, refused to comment on what it called gossips and assumption.

The company has mislaid 40 percent of its value since last year's max out, and is demanding to reinvent itself as a vendor of higher-margin services to businesses, an internal revamp that might be carried out away from public inspection.

Few analysts say incorporating the company private, a plan that has surfaced periodically in past years, creates sense.

But others keen to the pure expense of such a deal, a big debt load of some $4.5 billion and foggy prospects as a key player in a PC market that's declining with the arrival of tablets such as Apple iPad.

"The market value of Dell has gone down so much that a takeover has turned out to be something that is credible. They have regarding $5 billion in net cash and also free cash flow cohort that could keep up payments on debt from a leveraged buyout," said S&P Capital IQ analyst Angelo Zino. "However, we feel it's not likely, given the steep size of Dell and where the stock is presently trading at."

A takeover of the $19 billion company would be one of the major deals since the global downturn. Bloomberg earliest reported that Dell and private equity firms were talking about a deal.

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