Dell Shareholders Prepare to Vote on Company’s Future
Carl Icahn looks to derail Michael Dell’s bid as investors get ready to decide on the CEO’s $24.4 billion offer to buy the company.Michael Dell, after months of debate and a week of wooing shareholders, is set to learn the future of his namesake company when investors return to Texas July 24 to vote on his $24.4 billion bid to buy the company and take it private. In the mode of a politician in a close race, a key challenge for Michael Dell is getting the vote out. About 20 percent of shareholders have indicated they will vote against the proposal. Just as worrisome, 18 percent of shares hadn’t voted as of earlier this week, according to a Bloomberg report, and any absentees are considered “no” votes. Michael Dell needs to get 42 percent of shares voting for his bid if he and private equity firm Silver Lake Partners are to buy the company he founded 29 years ago and take it private. In a situation too close to call, every vote will count. Shareholders initially were scheduled to vote on the deal June 18, but the special committee assigned by Dell’s board of directors to investigate options for the company quickly adjourned the meeting. Industry observers believed committee members feared that Michael Dell’s $13.65-per-share offer did not have the necessary investor support and so wanted to give him more time to talk with shareholders. According to reports, that is what the CEO has done over the past six days, meeting with a range of crucial institutional investors.
In the meantime, activist investor Carl Icahn, who has made a counterproposal that the special committee has refused to declare superior to Michael Dell’s, is continuing to urge shareholders to reject the founder’s offer, saying it undervalued the company and would benefit only Michael Dell and Silver Lake at the expense of investors.