Talking tech since 2003

Dell’s recent move to go private in a $24.4 billion deal didn’t go unnoticed by former CEO of Hewlett-Packard Carly Fiorina.  In fact, Fiorina predicted the company could see further consolidation, and she may be right.

Fiorina told me in an interview at the Harvey Nash Leadership Lecture in New York on Wednesday that Dell’s move to go private makes a lot of sense because it gives the company time to regroup and could attract some merger and acquisition activity in the marketplace.

“I think it creates some interesting new possibilities in the PC space, I mean maturing industries need to consolidate–all of a sudden you have this private entity that maybe can attract some consolidation, so I think it was a smart move.”

And that’s exactly what’s happening…maybe we should call Fiorina the “Oracle of Silicon Valley?”

Dell reportedly has attracted interest from Hewlett-Packard and Lenovo Group as its board seeks bids higher than the $24.4 billion offer from Silver Lake Management and Michael Dell, according to Bloomberg News.

While Dell’s competitors are taking advantage of the so- called go-shop period to get access to its books, it’s unlikely that an alternative bid will emerge, reported Bloomberg News, citing people familiar with the situation.

A merger between one PC maker and another PC maker may not make a whole lot of sense as the area continues to struggle.  In fact, on Monday, Gartner released new research showing that “worldwide PC shipments totaled 90.3 million units in the fourth quarter of 2012, a 4.9 percent decline from the fourth quarter of 2011.”  The reason that PC sales have fallen, says Gartner, is that consumers are using tablets as their primary content consumption devices and are only using PCs for productivity.

Fiorina agreed with that assessment.

“Why is the personal computer industry– the desktop–struggling?  Because its not mobile, and its not personal, I mean its a big clunky thing, actually when you think about it, and you’re tethered to it, instead of it being tethered to you,” she said.

Some of Dell’s largest investors, including Southeastern Asset Management and T. Rowe Price Group, believe the $13.65 per share buyout by Silver Lake and Michael Dell undervalues the company and have asked for an offer of as much as $24 a share.  The deal requires the approval from a majority of shareholders excluding Michael Dell, company’s top investor.

Fiorina believes that whatever Dell’s fate, the company has to commit to a direction.

“They either have to get less into the device market or they have to follow the trends in the device market–they have to go one way or another,” she said.

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