Dell’s Private Deal: Proxy Advisory Firms Reaffirm Support

DellBy Brand Union Studio (NY)[1] (Extracted from icon-brand.svg) [Public domain], via Wikimedia Commons

Dell Inc. (NASDAQ:DELL) issued a new statement indicating that leading proxy advisory firms support its agreement with the consortium of buyers led by its founder and CEO, Michael Dell, and Silver Lake to acquire and take the company private  for $13.88 a share.

Dell's Private Deal: Proxy Advisory Firms Reaffirm Support

Dell’s acquisition price

According to the PC maker, the Institutional Shareholder Services Inc. (ISS), Glass, Lewis & Co. and Egan-Jones Ratings Co. published reports and each maintained its recommendations in-favor of the acquisition price offered by Mr. Dell and Silver Lake.

“We are pleased that all three of the nation’s leading proxy advisory firms have reiterated their support for the proposed sale transaction. Each has conducted an independent review of the amended merger agreement and all of its terms and concluded, as has the Special Committee, that a sale of Dell for $13.88 per share in cash serves the best interests of Dell shareholders,” according to Dell Inc (NASDAQ:DELL).

The company also pointed out that the proposal provides meaningful premium to the unaffected share price, certainty of value, and the buyout group would take the risk of its weakening PC business & its existing transformation effort.

The special committee of Dell once again encouraged the shareholders of the PC maker to approve its agreement with Mr. Dell and Silver Lake during the special meeting on September 12.  According to the committee, all shareholders should vote through the internet, phone or mail regardless of the number of their stockholdings.

Increase in buyout proposal

Mr. Dell and Silver Lake increased their buyout proposal to Dell Inc (NASDAQ:DELL) by a dime including a special dividend of $0.13 from their original offer at $13.65 a share to gain the approval of shareholders. The consortium wants to take the company private and implement a turnaround strategy without the attention of the public markets. Mr. Dell wants to transform the PC maker to become a leading provider of technology and services for corporate data centers.

Activist investor Carl Icahn and Southeastern Asset Management are against the transaction. The activist investor’s alternative proposal for Dell is $14 per share and a warrant to purchase more shares of the company after the stock reach a price of $20 per share. According to Icahn, his proposal would end up around $15.50 to $18 per share including the value realized from the warrant.

Dell Inc (NASDAQ:DELL) is trading around $13.77 per share, slightly down on Tuesday around 2:29 in the afternoon in New York.

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About the Author

Marie Cabural
Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.

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