Blackstone Group LP's preliminary bid to take over Dell Inc. issetting the stage for a rare event: a bidding war betweenprivate-equity firms.

Blackstone, the world's biggest buyout firm, and activistinvestor Carl Icahn made separate offers last week that rival a$24.4 billion bid for the computer maker by Dell founder MichaelDell and Silver Lake Management LLC, according to a statement todayfrom Dell. The shares rose 3.2 percent to $14.59 at 9:31 a.m. inNew York, 6.9 percent above the Silver Lake offer.

While competition for buyout targets is often vigorous in theearly stages of auctions, private-equity firms, which buy companiesin expectation they can sell them later at a profit, are usuallyreluctant to make competing bids once a deal has been agreed.Go-shop periods, during which the buyout target can solicitcompeting offers after the initial agreement, too often arecosmetic affairs that give bidders little time to mount achallenge, said Erik Gordon, a business and law professor at theStephen M. Ross School of Business at the University of Michigan inAnn Arbor.

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