SAN FRANCISCO -- They faced off as chief executives of the two main competitors in the personal computer market.

Now, Michael Dell and Mark Hurd could end up in another showdown: this time, over who should lead Dell.

In an odd twist to Dell's bid to go private, Michael Dell and Silver Lake Partners' plan is facing a possible challenge from Blackstone, another private equity firm that, according to media reports, is considering placing a higher bid. Based on a deadline set by the Dell board for a "go-shop period," Blackstone has until a minute past midnight on Saturday to make its pitch.

Michael Dell, 2008. (AP Photo/Ahn Young-joon)
Michael Dell, 2008. (AP Photo/Ahn Young-joon) (Ahn Young-joon)

And that bid supposedly would include a key enticement: Hurd, the former CEO of Hewlett-Packard (HPQ), Dell's chief nemesis during the heyday of the PC wars and now co-president at Oracle (ORCL).

Dell Inc. and Blackstone declined to comment on the reports.

"The use of dueling CEOs like this is a little unusual, and I think that does make it a slightly different case," Santa Clara University law professor Stephen Diamond told MarketWatch.


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Having another private equity firm put up a rival bid isn't unusual, said Stanford University law professor Michael Klausner. "What's unusual is the celebrity aspect," he told MarketWatch, referring to high-profile reputations of both Dell and Hurd.

But then again, he added, given Michael Dell's prominent role both in terms of his personal investment and his role as a company founder and CEO, a rival bid simply had to come up with a counterproposal that would try to match that prominence.

"The first deal is so linked to Michael Dell that an alternative deal almost has to be linked to somebody else," Klausner said. "Michael Dell is such an important part of the initial buyout offer that a competitive bidder would need to offer an assurance that's going to be able to run the company without Michael Dell."

Michael Dell has a huge stake in the company that is helping to finance the $24.4 billion buyout deal, in which shareholders will get $13.65 a share.

Mizuho Securities analyst Abhey Lamba wasn't too impressed with the Blackstone scenario featuring Hurd.

"It is a bit of a unique situation, as Michael Dell is still involved with the company and he is also a very large shareholder," he told MarketWatch. "So bringing in a new CEO to replace Michael in a buyout scenario might be a tough proposition."

But IDC's Crawford Del Prete speculated on a different scenario in case there is a bidding war, one in which Michael Dell and Hurd end up working together -- if the two bidding parties were able to reach some sort of compromise.

"I think the reason Mark Hurd's name is being thrown out here is he is a very rare guy," Del Prete told MarketWatch. "He is a guy who understands the very business Dell is in."

And he sees Hurd playing a role another former Dell CEO, Kevin Rollins, took on, in partnership with Michael Dell.

"This is no uncharted territory for a guy like Michael Dell," he said. "If you go back to the days of Kevin Rollins, he was pretty much the operations lead, while Michael spent more time on different areas."