The world’s third-largest personal-computer maker, Dell is in exclusive talks to buy Compellent Technologies for about $876 million, a discount to the data-storage maker’s current market value.
Both the companies inked an exclusive agreement to negotiate a merger agreement in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash. Takeover bids are typically offered at a premium in order to entice a buyout target to sell itself. But Dell’s bid is for nearly 20% less than Compellent’s trading price prior to the announcement of the deal. Nicknamed a “take-under,” the maneuver is a rarity in business.
Dell said in a release that “there can be no assurances that an agreement will be reached or that a transaction will be consummated.”. The Round Rock, Texas–based company said the two companies do not plan to comment further “until an agreement is reached or discussions are terminated.”
Dell is using acquisitions to expand its data-center offerings, such as computers servers and storage, and lessen its dependency on the desktop and notebook market, where profit margins typically are lower. Compellent, based in Eden Prairie, Minnesota, would help Dell add technology that helps customers store, recover and manage large amounts of data.
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