DELL Case: LBO and MBO

 

Actual (and completed) case:A group of Dell shareholders has approached you as a financial expert to analyze whether they got a fair price in the MBO of Dell. The shareholders are still wondering whether, compared to other similar privatizations, they were treated fairly or not. Your task is to explain what a LBO(especially MBO) is and what has happened in the past to normal shareholders who were not part of a MBO team. A key question is to assess the price that normal shareholders got at the time of the MBO, based on the financial situation at that time. You should concentrate on the financial side and not get involved in legal fine points. You are supposed to write a concise and well researched report. The report can rely on any type of sources (academic papers, newspaper articles, books, net sources, blogs, interviews, etc.) but all the sources have to be carefully referenced, quoted and critically assessed.
write a Follow-up Research Paper on the Dell Case, which includes the following items: – summary of the findings of the Dell class assignment and discussion- analysis of Dell strategy, market position, M&A, technology, profitability, growth, investments etc. From where the case ended till today- estimates of the development of the value of Dell up to today- revisit the issues raised in the Dell assignment based on what we know now, for example was the price fair, were the concerns of opponents of MBO warranted or not, who benefited from LBO, what Dell could do as a private company that it could not have done as a public company etc.- compare Dell MBO development to other recent MBOs

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General information:
How to structure the case analysis?
The following issues are typical parts of a case analysis:- what is the overall strategic situation of the company, big picture?- what are the real decisions that have to be made?- who are the crucial persons and stakeholders in the decision? – what are the alternatives?- where do alternative courses of action lead the company?- what are proper decision criteria in this case?- what is your recommendation/decision and why?
First question: what is the situation and problem in this case?Debate on the nature of the situation and real problem.Further issues: Analysis of alternatives and their consequences. Debate.Final arguments and recommendations. Summary.
– Whatisthe real issue? – Isvaluecreatedordestroyed in variousalternatives?- Whoare thepersons(parties) in thedecisionmaking?- Who are to gainor lose financially in differentscenarios?- Preliminaryanalysis of case questions
Key point: Understandingtheessence of theproblem and explainingwhatisneeded to find a reasonablecourse of action (evenifalldetailscouldnot be handled)
Nature of a case and how we should approach it:Cases describe real managerial problems. You are invited to use all your business experience, knowledge, reference materials, and calculations to support your analysis and recommendations. Think what you would do in a similar situation. Case is not an analysis of history, it is analysis and practice of managerial decision making. Seize the opportunity to raise a strong opinion and to debate.

Grading will be based on: Financial understanding and thinking, level of analysis leading to the conclusions, quality of references, understanding of broader issues around the MBO of DELL, clarity of exposition and arguments..