Dell's special committee reportedly delaying shareholder vote

Dell's special committee reportedly delaying shareholder vote

Summary: If you're itching for Dell shareholders to just make up their minds already, you're probably going to have to wait even longer now.


Dell shareholders were scheduled to make a decision once and for all on July 18 about whether or not the PC company should revert to a private operation.

Looks like this soap opera is not going to be canceled just yet.

According to Bloomberg, the special committee set up at Dell to resolve this matter is supposedly planning to delay the vote in order to swing support toward CEO Michael Dell's $24.4 billion proposal.

The possible delay follows a move by prominent Dell investor Carl Icahn last week in which the American business magnate dropped hints touting his new proposal to Michael Dell's plans once again.

Icahn's latest suggestion outlined that Dell would self tender 1.1 billion shares of stock for $14 a share plus one transferable warrant for every four shares purchased.

These warrants would allow shareholders to purchase a share of Dell for $20 for seven years. Should Dell shares be worth more than $20, the idea is that these shareholders would benefit.

Here's a quick recap of where things have stood up until early July as company executives fight over whether Dell should revert to operating as a private company.

As of June 5, the Round Rock, Texas-based corporation had two options on the table:

  • An all-cash deal from Michael Dell and Silver Lake Partners for $13.65 per share

  • An alternative from Icahn and Southeastern Asset Management that leverages the company to pay a $12 special dividend and buy up 72 percent of existing shares.

Blackstone was previously involved in the mix, but later dropped out amid the global PC market meltdown.

There have been debates back and forth over whether Michael Dell and company should raise their initial $24.4 billion offer.

Icahn tried requesting a meeting with Dell's special committee on the matter after lining up approximately $5.2 billion in loans to back his alternative buyout bid.

However, the special committee rejected Icahn's bid as "inconsistent".

Concurring with Silver Lake, top proxy advisory firm Institutional Shareholder Services backed the CEO's plan earlier this week.

Topics: PCs, Dell, Hardware, Tech Industry

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  • They better delay more!

    The PC market has collapsed from 360 million units in 2012 to about 340 million units projected in 2013. This is not enough of a decline. Ultimately, 70% of the consumer PC sales in both developed and emerging market economies will be subsumed by the tablet market.

    The major shareholder among the tablets is Android. This may be followed by Windows tablets. But Windows 8 tablets are not there yet in share since 7" tablets are not out. Until that happens, Dell has to focus on a declining PC market and that should decline the margins too for a few more quarters. Carl Icahn might not see this but this is a depressing fact for all involved in this.