Dell and Best Buy: Tough Takeover Trades

Tickers in this article: BBY DELL HPQ MSFT RIMM

For the ordinary investor, playing the eventual takeout of a company like Best Buy or Dell is a risky game given the limited resources of the private equity industry and a plethora for former blue chip tech stocks that are now rumored to be in buyout negotiations.

In the case of Dell, those assessing the takeout value of the third leading PC maker see limited upside from current share prices, which already appear to test the limits of what a private equity firm may be able to handle.

Earlier in January, Bernstein Research analyst Toni Sacconaghi gave the PC-maker a sum of the parts value of $12 a share - roughly in line with current share prices .

Sacconaghi, noted that both Dell and HP being valued at their breakup value by some investors given a bleak outlook for a PC market turnaround. HP's individual assets, the analyst calculated, are worth $29 a share, in an analysis that gives investors a better chance at a return.

-- Written by Antoine Gara in New York