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by Staff Writers New York (AFP) April 19, 2013 Dell announced Friday that the bidding consortium led by Blackstone Management Partners, initially interested in acquiring Dell, has decided not to make an offer after all. Dell released a letter from Boulder Acquisition Corp., a partner in the Blackstone-led consortium, withdrawing from the bidding process. The letter cited the weak personal computer market and Dell's deteriorating financial condition. The withdrawal leaves investor Carl Icahn as the sole alternative bidder to a consortium led by company founder Michael Dell. While the Blackstone group continues to view Dell as "a leading global company with strong market positions," the letter cited what it called two worrisome conditions. The Blackstone group was troubled by an "unprecedented" 14 percent decline in PC sales volume in the first quarter of 2013, "its steepest drop in history, and inconsistent with Management's projections for modest industry growth." The letter also cited Dell's "rapidly eroding financial profile." Since Blackstone submitted its bid, Dell reduced its operating income projections for the current year to $3.0 billion from $3.7 billion. Michael Dell, joined by private-equity firm Silver Lake Partners, has proposed a $24.4 billion buyout of the company. Dell was also backed by a loan from Microsoft. But the Dell bid has drawn opposition from some leading shareholders who charged that the bid was too low. In a document submitted recently to the Securities and Exchange Commission, a special committee set up by Dell to explore alternative bids said it still supported the Dell proposal, but pledged to seriously consider alternative bids. However, Dell said in the SEC document that it was unclear whether a higher offer was merited because of the challenges facing the PC industry. The computer company faces tough competitive from low-cost manufacturers and rising competition from smartphones and tablets. Dell shares were 2.7 percent lower in pre-market trading.
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