Dell’s board of directors reportedly is considering delaying the July 18 shareholder vote on CEO Michael Dell’s controversial $24.4 billion bid to buy the company and take it private.
Citing an unnamed “person with direct knowledge of the situation,” Bloomberg said July 16 the special committee assigned by the directors to investigate the company’s future may postpone the vote for a week to give it time to seek a higher bid or to gain more support for the proposal put forth by Michael Dell and Silver Lake Partners.
The news comes two days before shareholders are set to vote on the Dell-Silver Lake offer, and as activist investor Carl Icahn makes an aggressive effort to derail the deal and gain support for his counteroffer, which among other things would keep Dell as a public company. Icahn, who owns 8.7 percent of Dell’s share, is now the largest outside investor in the company.
Publications such as the Wall Street Journal and Forbes are reporting that the shareholder vote is too close to call, with major investors like T. Rowe Price, Southeastern Asset Management—which also is a partner in Icahn’s counterbid—and investment firm BlackRock among those that are casting votes against Michael Dell’s $13.65-per-share offer.
Michael Dell in the past has refused to increase his offer, noting the 25 percent premium shareholders would realize with the proposal. However, some industry observers believe that given how close this vote appears to be, that could change.
“I think [a delay in the vote] also opens up the possibility that the Michael Dell team will come back and potentially raise their offer,” IDC Chief Research Officer Crawford Del Prete told Bloomberg in a televised interview.
Del Prete said there are some shareholders who would be happy to accept Michael Dell’s offer, take the money now and not risk any more deterioration in the stock price, and those shareholders will get more anxious as the voting day nears. However, delaying the vote would indicate the board of directors’ nervousness about the outcome of a vote.
“It basically says they want to take more time and weigh their options,” he said. “It definitely opens up the possibility that they want to do some more selling to existing shareholders to try to sell their story.”