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Michael Dell Calls For Change In Voting Rules To Aid Buyout – Update

courtesy RFF Staff —

dell computerMichael Dell and private equity Silver Lake raised their offer to acquire Dell Inc. (DELL: Quote) by ten cents to $13.75 per share in cash, but subject to a change in voting rules that will aid the buyout process.

The buyout group has called for shares of unaffiliated stockholders that are not voted at the special meeting on the merger, to be ignored and not considered as being against the deal. That means only the majority of the outstanding shares held by the unaffiliated stockholders that are present and voting for or against deal are to be counted.

The buyout group’s new offer raises their $24.4 billion bid for Dell Inc. by $150 million.

Meanwhile, the Special Committee of the Dell Board is assessing the new offer, and has adjourned the shareholders meet, scheduled for today, to August 2.

The buyout group said their new offer is final and is contingent on the amendment to the voting rules. The offer will be withdrawn and terminated today at 6:00 p.m. New York time, unless extended.

The deal has not been smooth sailing for the buyout group, with major stakeholders like activist investor Carl Icahn and Southeastern Asset Management opining that the offer undervalues the PC maker.

While the Special Committee and the buyout group are keen on the deal, the former is seeking a higher offer price to win shareholder approval, given that Carl Icahn has threatened to have the board replaced.

Michael Dell – the company’s founder and CEO – and his affiliates hold a 16 percent stake in the company, but cannot cast their votes on the deal – a hindrance in his efforts to take the company private. The buyout group requires the support of at least 42 percent of outstanding shares for the deal to fructify.

Earlier this month, the Special Committee recommended its shareholders reject Carl Icahn’s proposal for a $15.6 billion self-tender by the company at $14 per share.

The committee believes it is unwise to layer substantial financial risk on a company facing major challenges from competition and from the changing dynamics in the technology space.

Dell stock is trading at $12.84, down 0.31%, on a volume of 78.4 million shares on the Nasdaq.

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This entry was posted on July 24, 2013 by in BIG DEALS, M&A's and tagged , , , , , , , .

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