* Canada pension fund manager CPPIB in talks to join
* Dell forms special committee to look at deal-source
* Temasek participation in Dell "not happening" -source
By Nadia Damouni and Poornima Gupta and Saeed Azhar
NEW YORK/SINGAPORE, Jan 17 Silver Lake Partners,
trying to finalize a bidding group to take Dell Inc
private, is in talks with the manager of Canada's pension plan
and other potential investment partners, people familiar with
the matter said.
Dell also has formed a special committee to take a close
look at any potential deal on the table, multiple sources with
knowledge of the matter told Reuters.
Silver Lake, in its quest to put together what would be the
largest buyout since the global financial crisis, has reached
out to the $170 billion Canada Pension Plan Investment Board and
other investors in its fund, known as limited partners, the
Thus far, Singapore's state investor Temasek Holdings Pte
Ltd -- another prospective equity partner that Silver
Lake has tapped -- is not interested in joining the consortium,
the people said.
While Silver Lake has yet to line up investment partners,
the buyout firm has told its bank lenders that it remains very
confident about its ability to secure equity financing, two of
the sources said.
Founder and CEO Mike Dell remains a linchpin of the effort.
The man who grew Dell from a college dorm-room hobby into the
world's No. 3 PC maker is sitting on an estimated personal
fortune of $14.6 billion, according to Forbes.
It is unclear how much the billionaire will contribute to
the buyout, or how much of his 14 percent stake in Dell will be
rolled into the deal, the sources said.
One of the two sources said Silver Lake did not need to line
up firm commitments from equity partners like CPPIB ahead of
time, because those could be secured after a deal structure is
devised and put in place.
"It is not pinned down as to what might be rolled and what
might be new. The other equity partners don't have to show up
with a signed commitment letter," the source said on condition
of anonymity because the discussions are not public.
"It is not around the equity. There is a very fluid
A Temasek spokesman declined to comment on market
speculation. A spokesman for the CPPIB declined to comment.
Silver Lake could not be immediately reached for comment. Dell
declined to comment.
Silver Lake is a known quantity to Dell or its top
executives. Michael Dell was an early investor in their funds
while board member Alex Mandl has also worked with the firm in
Dell's software chief, John Swainson, who joined last March,
was a senior advisor at Silver Lake.
One of the sources aware of Temasek's strategy said a
company like Dell does not fit into its investment themes, which
include "emerging champions" and "growing middle-income
"It's not happening," another source told Reuters on
Thursday, responding to media reports that Temasek is one of the
prospective investment partners talking to Silver Lake about
joining the consortium.
Wall Street analysts without direct knowledge of the deal
discussions have cast doubt on the wisdom of investing in a
stagnant PC industry rapidly getting eclipsed by a growing
preference for mobile connected devices, like tablets.
In the PC market itself, Dell has steadily ceded market
share to nimbler rivals such as Lenovo Group and is
struggling to re-ignite growth. That's in spite of Michael
Dell's best efforts in the five years since he retook the helm
of the company he founded in 1984, following a brief hiatus
during which its fortunes waned rapidly.
Silver Lake is having markedly more success on other aspects
of the deal. It has tapped Credit Suisse, Bank of
America Merrill Lynch, Barclays and RBC
to finance a potential deal, sources have previously told
A potential buyout of Dell -- a $19 billion company -- would
allow Dell, which has been trying to become a one-stop shop for
corporate technology needs as the PC market shrinks, to conduct
that difficult makeover away from public scrutiny.
Dell, which has been in talks with private equity firms on a
potential buyout, has had on-and-off discussions with the firms
but talks heated up late last year, sources have said.