The Dell Deal May Finally, Mercifully Be Nearing An End

Michael Dell and Silver Lake Partners sweetened their bid by offering a 13-cent dividend in exchange for delaying the vote until Sept. 12 so they can have time to sway shareholders to accept the new offer. Now updated with Icahn’s comments. posted on

Alexander F. Yuan, File / AP

Dell founder Michael Dell, along with Silver Lake Partners, has upped his bid with an additional dividend to take the company private following pressure from billionaire activist investor Carl Icahn.

Dell and Silver Lake Partners are now offering $13.75 along with a 13-cent dividend in exchange for a delay of the vote to Sept. 12, in addition to giving Dell and Silver Lake the modifications to voting rights they requested last week.

The dividend is being underwritten by none other than Dell himself, according to a report by AllThingsD. Earlier this week it had appeared that the deal was not going to go through after the special committee rejected Dell’s offer to increase the buyout price in exchange for changes to the voting standards.

“We believe modifying the voting standard is in the best interests of Dell shareholders, both because it has enabled us to secure substantial additional value and because it provides a level playing field for the decision facing shareholders,” the special committee said in a statement today. “The original voting standard was set at a time when the decision before the shareholders was between a going-private transaction and a continuation of the status quo. Since then, the nature of the choice facing shareholders has changed because of the emergence of an alternative proposal by certain stockholders.”

Dell and Silver Lake Partners had already delayed the deal likely because they could not secure enough guaranteed votes to ensure that the proposal would go through, as several large investors and big names have come out against Dell’s proposal since Icahn countered the offer with his own. In exchange for an increase in the price of the buyout, Dell and Silver Lake had essentially asked that non-votes on the deal not count in the vote.

Dell and Silver Lake Partners seek to take the company private as it navigates a challenging market where PC sales are declining rapidly in favor of mobile devices. Icahn and Southeastern Asset Management are pushing to replace Dell’s board, borrow money, and give stockholders an option of selling some shares back to the company.

Update: Icahn has written a letter about Dell’s bid, stating he was “pleased today to have won yet another battle, but the war regarding Dell is far from over” and calling the 13-cent increase an “insult” to shareholders and the dividend offer a “slap in the face.”

The letter went on to discuss the importance of Icahn’s lawsuit against Dell in the Delaware Court of Chancery, saying, “It is crucial that the Special Meeting and the Annual Meeting be held on the same date and time and that the same record date be used for both meetings. This is particularly significant due to the large number of shares that are now in the hands of arbitrageurs.”

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