Michael Dell along with his partner Silver Lake raised their buyout offer by 10 cents to $13.75 per share to take Dell Inc. (NASDAQ:DELL) private.
The revised proposal would net shareholders $150 million more than the earlier $24.4 billion they would have received in the initial proposal from Michael Dell.
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Dell’s board has also adjourned today’s shareholder meeting until the afternoon of August 2.
Michael Dell failed to secure required votes
Last week, Michael Dell’s buyout plan failed to secure the required 735 million shareholder votes, falling short by 150 million shares.
Dell Inc postponed last week’s scheduled shareholder meeting to vote on Michael Dell’s $24.4 billion buyout plan, with an eye on soliciting more proxy votes.
Alex Khutorsky, managing director of The Valence Group, an M&A advisory investment bank stated:
Following the recent proposal from Michael Dell, the company indicated in a statement today that it has cancelled today’s special meeting of shareholders and plans to hold a vote on the new proposal on August 2.
Earlier this year, founder and CEO Michael Dell made the original buyout offer for his company. It involved paying Dell Inc. (NASDAQ: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. This proposal is considered the largest buyout since the financial crisis.
Carl Icahn’s sweetened offer
Activist investor Carl Icahn sweetened his offer by offering a warrant to his offer for Dell. This revised offer would imply Dell shareholders would derive greater value, if the stock hits $20 per share.
Michael Dell and partner frustrated
Michael Dell and his partner in their letter to the board of Dell indicated they are becoming frustrated with the process. They indicated that ‘this is our best and final proposal’ further adding that the company has until 6 p.m. ET tonight to make a decision or it will be withdrawn and terminated.
Brian White of Topeka Capital notes in a new report:
In our view, the delayed vote may speak to the Silver Lake/Dell transaction not finding necessary support to approve the $13.65 proposal. As such, we expect Carl Icahn to shoot back a vitriolic rebuttal to this new proposal this week. Keep in mind, Carl Icahn released a letter to shareholders on July 12 that included a sweeter proposal. Under Mr. Icahn’s proposal, Dell would “self tender” for 1.1 billion shares (~71% of stock) in exchange for $14 per share plus shareholders would receive one transferable warrant (with an exercise price of $20.00 for seven years) for every four shares purchased in the self tender offer. As such, Mr. Icahn estimates the value of this bid to shareholders would be $15.50-$18.00 per share and well above the Silver Lake/Michael Dell bid of $13.65.