Dell To Buy Acer?

An interesting deal cooked up by Bernstein’s Toni Sacconaghi: In a note (summarized here by Barron’s), he proposes that Dell (DELL) should buy rival PC maker Acer.

Why? Because the PC market could afford consolidation, and because Acer is strong in overseas notebook sales, where Dell is weaker. One thing we’d add: Acer is also riding the netbook wave, which helped it grow Q1 shipments 27% year-over-year to a 13% global market share, according to Gartner.

Fair enough. But it’s a big deal that wouldn’t be easy to do right now.

Sacconaghi thinks it could cost $5.7 billion to get the deal done, a 20% premium. A cash-only deal doesn’t seem likely: At the end of Dell’s last quarter, it had $8.4 billion of cash and $1.9 billion of long-term debt. Doesn’t seem like they’d blow most of their cash wad on that kind of deal. And a cash-and-stock deal isn’t ideal, either — Dell’s stock is trading around $11.85, or 55% off its 52-week high.

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