Michael Dell Encouraged to Increase Offer for Company: Reports
Faced with a competing bid and worries that investors may not support the deal, Dell’s board is urging the CEO to up his bid.Michael Dell reportedly is under increasing pressure to increase his offer to buy his namesake company or risk having his bid rejected by shareholders later this month. The $24.4 billion proposal from Michael Dell and private equity firm Silver Lake Partners to buy the PC maker and take it private has been criticized by some major shareholders since it was proposed in February. However, with the July 18 shareholder meeting to vote on the bid about two weeks away, Michael Dell and Silver Lake find themselves facing other challenges. Notably, investors Carl Icahn and Southeastern Asset Management have gotten the necessary financing for their counteroffer for the company and are pressuring the Dell board of directors' special committee that is reviewing the company's options to claim their proposal is superior to Michael Dell's. At the same time, the influential Institutional Shareholder Services is expected to issue its report on the Michael Dell-Silver Lake bid next week, and reports are surfacing that the ISS will most likely recommend that shareholders vote against it.
In the face of the Icahn bid and the ISS reports, the special committee, increasingly concerned about the future of Michael Dell's proposal, over the weekend suggested to the CEO and Silver Lake that they up the $13.65-per-share offer to increase its likelihood of being accepted by shareholders. Both Bloomberg and the New York Times said Michael Dell listened to the committee's recommendation, but has not yet responded. Citing a "person close to" Silver Lake, the New York Times said that Dell and Silver Lake officials have not discussed raising the price.