Michael Dell is trying to crush passive resistance to his bid to buy his eponymous computer company. The minuscule 10 cent increase to $13.75 a share, or $24.6 billion in total, won't win many shareholder votes. But he and backer Silver Lake want the board to stop treating abstentions as rejections. If that's adopted, investors really wanting to scupper Dell's buyout would have to vote against it.
Management buyouts often stick in investors' craws, and this one is no different. Some of Dell's biggest shareholders have put up substantial active resistance. Carl Icahn, with Southeastern Asset Management's support, has tried to torpedo the deal, promised a proxy fight and lobbed in various alternative offers.
Michael Dell's revised bid is another admission the buyout in its current form wouldn't pass - a week after a vote on the deal was postponed. Of course, he and Silver Lake could have won over sufficient votes by simply raising the price to a knock-out level. Instead, they're hoping to eliminate the easy way to dissent and ignore those shareholders who can't be bothered to vote either way.
Investors wouldn't be hurt by the change. They can still vote against the deal. That would be rather rash, though, as there's no attractive alternative bid on the table. Icahn's is contingent on a successful proxy fight and would leave investors holding a highly leveraged stub of equity.
Silver Lake and Michael Dell say their offer is their "best and final" and it will expire by 6 pm New York time on July 24 -unless they say otherwise. But the interminable length of the sale process, the fact they are now asking for a material change in the voting process and the willingness of the parties to come back to the table multiple times all suggest the board might yet be able to wring a few cents more out of the bidders.
Management buyouts often stick in investors' craws, and this one is no different. Some of Dell's biggest shareholders have put up substantial active resistance. Carl Icahn, with Southeastern Asset Management's support, has tried to torpedo the deal, promised a proxy fight and lobbed in various alternative offers.
Michael Dell's revised bid is another admission the buyout in its current form wouldn't pass - a week after a vote on the deal was postponed. Of course, he and Silver Lake could have won over sufficient votes by simply raising the price to a knock-out level. Instead, they're hoping to eliminate the easy way to dissent and ignore those shareholders who can't be bothered to vote either way.
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Silver Lake and Michael Dell say their offer is their "best and final" and it will expire by 6 pm New York time on July 24 -unless they say otherwise. But the interminable length of the sale process, the fact they are now asking for a material change in the voting process and the willingness of the parties to come back to the table multiple times all suggest the board might yet be able to wring a few cents more out of the bidders.