Dell confirms Blackstone drops takeover bid amid PC slump

From CNET News.com: Blackstone Group has withdrawn its proposal to buy Dell for $25 billion, citing the weak PC maker and poor financial results, Dell confirmed today.

The private equity firm last month launched a bid for the computer maker to rival a $24.4 billion buyout offer from Silver Lake and Michael Dell. However, since that time, the troubles facing Dell have become more clear, causing Blackstone to drop its bid. News of the withdrawal was originally reported Thursday by some outlets.

Blackstone noted in a letter to Dell's special committee that a "unprecedented 14 percent market decline in PC volume in the first quarter of 2013" worried the firm and didn't line up with Dell's projections for modest industry growth. In addition, Blackstone's evaluation of Dell showed a "rapidly eroding financial profile." Since the bid submission, Dell cut its projections for operating income in the current year to $3 billion from $3.7 billion, the firm said .

PC sales have been weak for quite some time, with quarterly results from computer and semiconductor makers reflecting the hard times. The sector is not only being hurt by the weak economy but also by consumers opting for mobile devices instead of traditional PCs. Microsoft's latest operating was expected to boost sales, but instead, analysts believe it's hurting the market.

Tech research firms Gartner and IDC last week said first-quarter PC shipments posted an ugly slump in the first three months of the year, the worst since IDC started tracking the figures in 1994. The period marked the fourth consecutive quarter of year-over-year shipments decline, and the market is expected to slump for all of 2013.

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