Dell Buyout: Special Committee Consider Delaying Shareholder Vote

By Mani
Updated on

Dell special committee of the board is reportedly considering delaying the July 18 shareholder vote on the $24.4 billion buyout plan.

Dell Buyout: Special Committee Consider Delaying Shareholder Vote

Serena Saitto of Bloomberg in a report indicated the special committee is likely to make a decision by the morning of July 18, if majority of votes are cast against the buyout proposal.

Carl Icahn’s Sweetened Offer

Last week, activist investor Carl Icahn sweetened his offer by offering a warrant to his offer for Dell Inc. (NASDAQ:DELL). This new offer would imply Dell shareholders would derive greater value, if the stock hits $20 per share.

Warrants are a common method adopted by competitors to attempt to add value during buyout bidding. Carl Icahn’s proposed warrant would get added to his $14 per share tender offer. In his recent letter, he indicated that the value shareholders would end up seeing, with the addition of the warrant, between $15.50 and $18 per share.

T. Rowe Price To Vote Against Michael Dell’s Offer

Adding to the recent flurry of activities, one of the largest shareholders of Dell Inc. (NASDAQ:DELL), T. Rowe Price issued a statement saying it plans to vote against the leveraged buyout offer being brought by Dell’s founder and the private equity firm Silver Lake.

Michael Dell’s Buyout Proposal

Earlier this year, founder and CEO Michael Dell made the original buyout offer for his company. It involves paying Dell shareholders $13.65 per share and then taking the PC maker private. The buyout proposal from Michael Dell and the private-equity firm Silver Lake Partners received support from the influential shareholder advisory firm Institutional Shareholder Services.

“No Brainer” Opportunity For Dell Shareholders

In his last week’s letter, the activist investor Carl Icahn highlighted a ‘no-brainer’ exists at Dell Inc. (NASDAQ:DELL) as by owning Dell and opting for appraisal rights, the shareholders have a rare opportunity to make a profit without taking risk.

According to Serena Saitto of Bloomberg, if the voting is adjourned, it would provide the buyers with time to increase their offer or declare the current bid of $13.65 a share as best and final. Citing known sources, Serena Saitto indicated the adjournment would also provide an opportunity to the shareholders to change their minds and to recast their votes up until the last minute.

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