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Dell Founder Sweetens Offer to Take the PC Maker Private

July 24, 2013
URL: http://www.entrepreneur.com/article/227550

In a leveraged buyout attempt that has turned into a long and contentious process, Michael Dell and his investment partners have upped their bid to take the company he founded private to $24.6 billion. The increased offer comes after a shareholder vote was delayed last week in order to drum up more support for the deal.

The new offering values shares of Dell Inc. at $13.75. Dell and investment firm Silver Lake Partners' previous offer of $24.4 billion would have valued the shares at $13.65.

The new price, however, comes with a caveat: the decision will be made by a simple majority in a straight up-and-down vote. Under the previous arrangement, shares that were not voted were counted as "no" votes -- a provision Dell and his allies called unfair. Shareholders are expected to vote on Dell's new offer on August 2.

Related: Dell Postpones Buyout Meeting as More Votes Needed

The move is the latest development in a drawn out battle between Dell and business mogul Carl Icahn, who is also attempting to buy a controlling stake in the company. Icahn expressed his distaste for Dell's initial go-private offering of $24.4 billion in a letter to the Dell Board in March, saying that the proposed deal is "not in the best interests of Dell shareholders and substantially undervalues the company." In another letter this week, Icahn voiced his disapproval of the rescheduled shareholder vote.

In June, Icahn presented the board with a counteroffer that would value shares at $14 and informed the board that he had purchased 72 million shares of Dell Inc. stock from Southeastern Asset management, the PC manufacturer's largest outside shareholder.

The improved offering from Dell comes weeks after a special committee charged with evaluating the offer advised Dell and Silver Lake to sweeten the pot. The shareholder vote had been scheduled for last week but the special committee postponed it appeared as though Dell's offer didn't have enough support among shareholders.

Related: Dell Founder Stands Firm on Buyout Offer