ISS endorses Dell, Silver Lake buyout plan for $24.4B

ISS endorses Dell, Silver Lake buyout plan for $24.4B

Summary: A top proxy advisory firm is endorsing the Dell founder's offer of $24 billion to privatize the computing company, and all but rejecting Carl Icahn's premium offer.


Michael Dell's bid to buyout the company he founded and take it private was given an important thumbs-up by a top proxy firm on Monday, recommending that shareholders take the $24.4 billion deal and run with it.

The endorsement by top proxy advisory firm Institutional Shareholder Services backs a plan by the computer-making company's founder to, in conjunction with Silver Lake, pay $13.65 per share for all existing shares in the firm.

It's impossible not to see the endorsement as a big victory for Dell, while being at the same time a giant middle finger to Carl Icahn, who continues to gnaw away at Dell's bid of $24 billion with his own scrapings from the billion-dollar floor.

Icahn, along with partners Southeastern Asset Management, wants to buy up to 72 percent of existing shares, pay a special dividend to investors and leave a segment of the company in the public domain. 

Icahn only requested a meeting with Dell's special board committee, tasked with choosing the best offer available, after securing a $5.2 billion loan earlier this month. But earlier, the committee had rejected Icahn's repeated bids as "inconsistent" due to Icahn failing to explain how he will secure financing "for any of these schemes."

ISS noted that should shareholders not take the Dell offer, they must be willing to hold on to publicly trading shares amid a computing industry downturn.

The deal will be voted on by company shareholders on July 18, in just over a week's time.

Topic: Dell

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  • Good...

    Icahn comes to bury Dell, not to praise it. He's an example of the worst breed of vulture capitalist. He wants to buy the company, load it up with debt. Use that debt to pay himself a fat "dividend" and then he'll gut and sell off what's left.

    Here's hoping Dell finds its footing now and one of America's premiere technology companies rises to new strength following a management model that has the company's best interests at heart.
    • D'accord, dsf3g

      My prayers are with Dell. Seems to me -- and correct me if I'm wrong -- Mr. Dell wants to diversify Dell in such a manner that the hardware and services are synergistic. Nowadays that's an increasing need, not only at the enterprise level, but especially at the lower level.

      Pretend my two-person firm suddenly hit our version of the bigtime. We don't have the mindset or the need for massive IT departments, but would very much subcontract the computer services so we can do what we do best. If Dell were able to handle that, not only would we buy their equipment, which we already love -- but we'd buy their services, too. We'd be happy, they'd be happy, our customers would be happy not to be deprived of our services, because we're not reinventing the IT wheel to do what we do.

      Millions of businesses are like mine in that sense. Icahn has the opposite vision (to put it charitably), and his vision is flat wrong.
  • Microsoft is headed out the door

    Dell's survival is not based on who buys the stock. Dells survival will be based on the company making a complete heading change out of the "Microsoft" world. When you look at the down turn in Microsoft "everything", it should be clear that there is no Money to be made holding onto anything related to the PC industry. People are vacating that world as fast as they can, and even though you see enterprises hanging on, even they are re-targeting software systems as they try and reduce their reliance on a software company that has continued to deliver destruction to their data and investments by mismanaging every aspect of the businesses involved.
    • RE: Microsoft is headed out the door

      While tablets and such may be hot, many of these are used as secondary devices. The majority of the business world still uses PC's and notebooks running Windows, and will for quite some time. VDI and BYOD are buzzwords but not the norm, and most enterprises are locked into the infrastructure as it is for some time.

      I am not a fan of Windows 8, but 100 million sales in the first six months is not a company that is disappearing.
    • And in related news,

      Carl Ichan was abducted by little grey aliens flying in a silver cigar shaped UFO, no word as to when they will return Mr. Ichan.
      • Would be nice, but...

        ...I think Mr. Icahn will be spending the remainder of his life on this planet.
        John L. Ries
    • And yet...

      ...MS is backing Michael Dell's offer. How come?
      John L. Ries
  • The Bump in the PC Road

    Yes millions of tablets are impacting the PC. I would not count its future sales out yet. Serious business calls for a PC play calls for a tablet. The Dell PC's are so good and Win 7 so reliable that yup expect a downturn in sales until companies demand more. So this is not the end it is a bump in the road and a good one for business giving them more confidence in the PC world!
  • I wonder if this means big things for Dell are coming...

    It seems as though this were intended to make Dell less susceptible to the whims of the market. Having your stock drop in half whenever your CFO clears his throat is not conducive to long-term planning. With luck, they'll be able to pull some more big-picture plans out, instead of only being able to plan for each quarter as it comes.

    Of course, this means that they probably won't get as much coverage from financial analysts, but that may be to their good fortune in the long run.
    Third of Five