The Blackstone Group is dropping its effort to acquire the computer maker Dell, citing slumping personal computer sales and Dell's "rapidly eroding financial profile."
Blackstone and its partners said in a letter they have ditched a plan to buy most of the company's outstanding stock for $14.25 per share due those challenges, which surfaced after the bid was submitted last month.
The letter from the group to a special committee of Dell board members was disclosed today.
The letter from the private equity firm noted that PC shipments plunged by 14% in the first quarter, and Dell has lowered its operating income forecast for this year to $3 billion from $3.7 billion.
That leaves Dell with a $24.4 billion offer from a group that includes its founder and CEO Michael Dell that would take the company private and a preliminary proposal from billionaire investor Carl Icahn for a majority of Dell stock while keeping the technology company publicly traded.
Dell, based in Round Rock in Texas, agreed earlier this year to sell itself to Michael Dell and a group of investors led by Silver Lake Partners for $13.65 per share.
But key shareholders have been unhappy about that offer, and competing bids have since emerged.
The board's special committee has said it believed Blackstone's proposal could be more lucrative than the deal struck with Michael Dell and Silver Lake. But it wanted to review the formal terms of Blackstone's bid before making a final assessment.
Icahn has submitted a proposal to pay up to $15 per share for 58% of Dell's stock.
