Blackstone and its partners said in a letter to Dell Inc. that they have ditched a plan to buy most of Dell's outstanding stock for $14.25 per share due those challenges, which surfaced after the bid was submitted last month. The letter from the group to a special committee of Dell board members was disclosed Friday.
The letter noted that PC shipments plunged by 14 percent in the first quarter, and Dell has lowered its operating income forecast for this year to $3 billion from $3.7 billion.
That leaves Dell with a $24.4 billion offer from a group that includes its founder and CEO Michael Dell that would take the company private and a preliminary proposal from billionaire investor Carl Icahn for a majority of Dell stock while keeping the technology company publicly traded.
Shares of Dell fell more than 2.8 percent, or 39 cents, to $13.95 before markets opened Friday.
When asked about Blackstone's characterization of Dell's financial profile, spokesman David Frink said in an email the company remains focused on its customers and "providing innovative products."
Representatives of New York-based Blackstone did not immediately respond to a call from The Associated Press seeking comment.
Dell, based in Round Rock, Texas, agreed earlier this year to sell itself to Michael Dell and a group of investors led by Silver Lake Partners for $13.65 per share. But key shareholders have been unhappy about that offer, and competing bids have since emerged.
The board special committee has said it believed Blackstone's proposal could be more lucrative than the deal struck with Michael Dell and Silver Lake. But the committee wanted to review the formal terms of Blackstone's bid before making a final assessment.
Icahn has submitted a proposal to pay up to $15 per share for 58 percent of Dell's stock.