Sam Boughedda

Toni Sacconaghi Bernstein analyst said that it is unlikely that Dell Technologies CEO Michael Dell (NYSE:), will sell the company again.

According to the analyst, Michael Dell and Silver Lake who hold a large stake in the company’s success, will likely require $17 billion to $22 trillion to acquire all remaining shareholders.

Given that Michal Dell can use the cash proceeds of VMWare shares to pay down his incremental debt, Dell’s potential incremental debt could be anywhere from $10-15B. Sacconaghi said that Dell might be able pay off its entire incremental debt within 2-3 years in a take-private situation. Another option is for Dell to gradually become private by using its FCF, to buy outstanding shares that are not owned by Silver Lake or Michael Dell.

Another option is to repurchase shares quickly over the next one to two years and then look to privatize Dell, according to the analyst.

He added, “At that time, taking Dell private might potentially be funded by debt financing alone.”

The real question is, of course, whether Michael Dell will ever want to return private at all. It’s hard to believe that it would not, as we’ve seen the process before and know what it takes. It is important to note, however, that aggressively buying shares can be dangerous – Dell does not have a lot of float, the super majority voting structure restricts inclusion in the, and too many shares could lead to a decrease in liquidity and loss of interest.