DealBook: Filing Shows Twisting Path to Three-Way Race for Dell

Joe Raedle/Getty ImagesA Dell computer for sale at an Electric Avenue store in Miami.

Though the race for Dell Inc. has narrowed to three contestants, many more arose over a month ago.

Advisers to Dell directors spoke to 71 potential bidders during a 45-day period aimed at finding alternatives to a $24.4 billion offer by Michael S. Dell and the investment firm Silver Lake, according to a securities filing by the company on Friday.

The long-awaited proxy filing includes a lengthy history of the merger, detailing in 26 pages the negotiations that led to the Dell transaction. In particular, it shines a light on the 45-day “go shop” period, which ended last week with preliminary bids by the Blackstone Group and the billionaire Carl C. Icahn.

Dell is expected to point to the efforts recounted in the filing as proof that its board fought hard to find the best possible outcome for shareholders, as several investors continue to argue that the existing $13.65-a-share bid by Mr. Dell and Silver Lake is too low.

According to the filing, bankers at Evercore Partners reached out to strategic and financial buyers starting soon after the deal with Mr. Dell was signed on Feb. 5. Several suitors were rejected because they were interested in only a piece of Dell’s businesses.

On Feb. 6, Blackstone contacted Evercore, saying it wanted to participate in the go-shop process. The private equity giant had already expressed interest the previous month in potentially bidding for Dell.

A month later, Blackstone and potential partners met with Mr. Dell to further discuss a bid.

Other private equity shops emerged as well. The filing refers to a “Sponsor B” that held discussions with Dell directors late last year and was willing to take another look despite declining to bid the first time. People briefed on the matter identified that firm as TPG Capital.

Ultimately, TPG decided again not to participate in any bids.

A corporate bidder, identified as “Strategic Party A,” contacted Evercore on Feb. 8 to say it was interested in information about Dell’s financial services arm. That company — which people briefed on the matter said was General Electric’s GE Capital — later expressed interest in working with whatever group Blackstone convened to make a bid.

At least three other strategic buyers sought access to Dell’s books. Most were denied because they appeared interested only in bidding for part of the company.

Mr. Icahn first contacted Evercore on Feb. 26 about signing a confidentiality agreement. More than a week later, the billionaire wrote to the special committee, disclosing that he owned a “substantial” stake in Dell and warning that he would fight the proposed takeover by Mr. Dell.

By the go-shop deadline of March 22, Evercore bankers had received three expressions of interest. One was from GE Capital, which proposed to buy Dell Financial Services only if combined with any takeover bid, including Mr. Dell’s.

Blackstone also submitted an offer, now known to be over $14.25 a share, that would leave an unspecified portion of Dell public to let investors continue to own a piece of the company if they so wished. The firm disclosed that it was working with Francisco Partners and Insight Venture Partners.

In a twist, however, Blackstone demanded that the Dell special committee reimburse the costs of assembling that rival bid, up to $25 million. That request was granted on Monday.

Mr. Icahn offered to buy about 58.1 percent of the company for about $15.6 billion, or $15 a share. His proposal envisioned several major shareholders, including Southeastern Asset Management and T. Rowe Price, contributing their stakes as well.

Privately, some Dell advisers considered Mr. Icahn’s proposal simply a placeholder to keep negotiating with the special committee, according to people briefed on the matter. He has said he is reviewing Blackstone’s offer as well, leaving the door open to joining that consortium.

Filing Reports With S.E.C. Too Soon Can be Costly

These agents, who use an electronic system called Edgar, know that a new S.E.C. filing becomes instantly available online. Timing is a matter of strategy, with companies calibrating their releases to market hours. Deadlines can be missed, deals can fall through and stock prices can plunge unchecked if financial information is disclosed unexpectedly.

“It doesn’t happen often,” said Ron Passaro, a former filing agent in Manhattan. “The risk is insane.”

He added: “There’s really no way to pull it down once it’s up. You have to go through a lot of hoops and hurdles to pull it down, and by that time the damage is done.”

Posted information is quickly replicated by third-party Web sites. Once several Web sites pulled Bill Gates’s Social Security number from S.E.C. filings and publicized it.

On Thursday, Google said its filing agent, R. R. Donnelley & Sons, released its earnings several hours earlier than planned. The company’s stock dropped by nearly 10 percent, and trades were frozen for several hours.

Donnelley responded, “We are fully engaged in an investigation to determine how this event took place and are pursuing our first obligation — which is to serve our valued customer.”

Thankfully, several filing agents said, such errors are rare — and rarely are newsworthy. “I can’t remember one that’s been apparently as bad as this one,” said Alexander Zervakos, the president of Securex, a Denver-based filing service. Mr. Zervakos said his company had several safeguards against early posting and that employees were trained to look for signs of an unfinished document and personal information, like Social Security numbers or home addresses, that is sometimes inadvertently included.

In Google’s case, the document filed said “pending Larry quote,” indicating the place where a quote from the chief executive, Larry Page, was supposed to be inserted.

It is not clear how much liability R. R. Donnelley might bear for any losses Google incurred because of the early release of the report. Some have suggested that it will not be much because the earnings reported were accurate. But James Plumb, a longtime filing agent in Massachusetts, said he knew of at least one case in which an agent had to pay for its error, though it was two decades ago. “Could you get sued? Sure,” he said. “The way I look at it, yes, if I make a mistake, I’m responsible.”

R. R. Donnelley is the largest filing agent, according to secinfo.com, and has filed more than half a million documents with the S.E.C. over the last decade. It handled the filings for the Facebook initial public offering and files reports for large companies, including General Motors, Toyota and Michael Kors Holdings.

But filing documents is a tiny part of Donnelley’s huge printing business — providing about $225 million out of $10.5 billion in revenue, analysts said. The company prints catalogs, mailers, textbooks and magazines, among other items.

R. R. Donnelley recently expanded its financial printing operation, acquiring two companies that also specialize in filing, Edgar Online and Bowne.