Blackstone Group LP is weighing a bid for Dell Inc., the computer maker seeking offers to rival the proposed $24.4 billion buyout by its founder and Silver Lake Management LLC, said people with knowledge of the matter.

Blackstone may bid as part of a group including other investors, said one of the people, who asked not to be named because the process is confidential. The New York-based private- equity firm hasn’t made a decision, another person said. Under the go-shop provision of the Silver Lake merger agreement, Dell’s board has through March 22 to seek superior proposals, and can negotiate beyond that date if it receives an offer it deems serious.

An offer from Blackstone would increase the pressure on Michael Dell and Silver Lake to raise their $13.65-a-share bid after Dell’s two biggest outside shareholders already opposed what would be the largest leveraged buyout of a technology company since the financial crisis. Billionaire Carl Icahn has also amassed a stake and is pressing for a special dividend over a buyout. Still, it may be difficult for new bidders to turn around Dell without the CEO’s buy-in as PC business slumps, said Anand Srinivasan, an analyst at Bloomberg Industries.

“It’s very hard to put a value on a business that’s in structural decline,” he said. “How are you going to make money? Going private is all about how much value you can create.”

Business Shift

Blackstone, Hewlett-Packard Co. and Lenovo Group Ltd. have inspected Dell’s books after signing non-disclosure agreements, people familiar with the matter said this month.

Michael Dell is attempting to take the PC maker private after a quarter century as a publicly traded company as business has shifted toward cloud computing, where storage and software are delivered at low cost over the Internet.

David Frink, a spokesman for Dell, declined to comment. Peter Rose, a spokesman for Blackstone, wasn’t immediately available to comment.

Dell’s shares climbed as high as $14.69 in after-hours trading yesterday, or 7.6 percent above the bid from Michael Dell and Silver Lake, signaling investors are betting the price tag will ultimately exceed the current $24.4 billion offer. In German trading today, the stock traded at the equivalent of $14.52 as of 9:30 a.m. in Frankfurt.

Blackstone’s Interest

At least five analysts surveyed by Bloomberg this month said a bid for Dell could reach as high as $15 a share. At $15, Dell still would be going private at about 5.4 times earnings before interest, taxes, depreciation and amortization, the lowest multiple for a technology buyout larger than $1 billion, according to data compiled by Bloomberg.

Blackstone’s interest in Dell, the world’s third-largest PC maker, is considered more serious than that of Hewlett-Packard or Lenovo, which are also reviewing Dell’s finances, said one of the people familiar with the situation.

No one has yet submitted a proposal or letter to the board at this point for consideration, said another person with knowledge of the situation. The board would have to receive something by March 22 and then determine whether the interest would reasonably lead to a higher offer, this person said.

If Blackstone proceeds with an offer for Dell, it would be the buyout firm’s biggest technology deal since Freescale Semiconductor Inc., which it bought with two other private equity firms for $17.6 billion in 2006. Blackstone and its co- investors have registered a more than 50 percent loss on their $7.2 billion outlay, according to data compiled by Bloomberg.

Special Dividend

Dave Johnson, Dell’s former head of M&A, joined Blackstone last year as a partner in the technology group.
Icahn, who has also been conducting due diligence on Dell, this month asked the company’s directors to pledge they will implement his $9-a-share special dividend proposal if shareholders reject the Michael Dell-led offer. Otherwise, Icahn said, he will start a proxy fight and seek to replace the board with his own slate.
As part of the original deal, Dell agreed “to explore in good faith” working with another bidder that could beat Silver Lake’s offer, according to a Feb. 6 filing with the U.S. Securities and Exchange Commission.

The bid from Silver Lake requires approval from a majority of shareholders, excluding Michael Dell, who is contributing his 15.6 percent stake to the new company in addition to investing additional cash. Dell’s largest outside investors, Southeastern Asset Management Inc. and T. Rowe Price Group Inc., have argued the offer fails to reflect the company’s fair value.