Jefferies Sees Dell Buyers Raising Bid (DELL)

Jefferies Sees Dell Buyers Raising Bid (DELL)


Jefferies analysts sees information technology company, Dell Inc.(DELL) upping its offer price for the buyback of its shares.

After Dell announced its buyout price of $13.65 to shareholders, many shareholders felt as if the offer just was not worth it. Investors questioned whether or not to wait on selling the stock, since the current stock price was just under the offered buyout price.

As the stock price passed the $13.65 offered price, analysts are now expecting the company to boost that price. Analysts at Jefferies reported that they now expect Dell to offer shareholders $15 per share.

Jefferies analyst Peter Misek commented, “revising our LBO analysis to account for the details found in the M&A agreement, we believe that the bid could be raised to $15 to satisfy agitated shareholders. While many shareholders would obviously like a higher bid, we see competing offers as unlikely. We estimate $15 would yield a 20%-23% IRR and believe private equity would be unlikely to accept a lower rate.”

Although Misek sees a possible increase in the buyout price, he reaffrimed a “Hold” rating for the company, and raised the company’s price target from $13 to $13.65.

Dell shares were mostly flat during Tuesday morning trading. The stock has declined -22% in the past year.

The Bottom Line
Shares of Dell Inc.(DELL) have a 2.33% yield, based on Tuesday morning’s price of $13.75.

Dell Inc.(DELL) is not recommended at this time, holding a DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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