Blackstone Group drops out of race to buy Dell

SANTA CLARA, CA - OCTOBER 19: The Dell logo is displayed on the exterior of the new Dell research and development facility on October 19, 2011 in Santa Clara, California. California governor Jerry Brown and Dell Chairman and CEO Michael Dell attended a ribbon cutting to open the new Dell research and development facility that was followed by a career fair to hire hundreds of employees for the new facilty. (Photo by Justin Sullivan/Getty Images) Justin Sullivan

Dell (DELL) says buyout specialist Blackstone Group is ending a bid to buy the slumping computer maker, less than a month after pitching a plan to trump an offer from the company's CEO and founder.

A letter to Dell Inc. from Blackstone and others involved in the bid says a steep slump in PC shipments and Dell's eroding financial profile prompted them to end their bid. The letter notes that PC shipments plunged by 14 percent in the first quarter, and Dell has lowered its operating income forecast since the bid was submitted.

The Round Rock, Texas, company agreed earlier this year to sell itself to CEO Michael Dell and a group of investors led by Silver Lake Partners for $24.4 billion, or $13.65 per share. But key shareholders have been unhappy about that offer.

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