Dell presses shareholders ahead of buyout meeting

After months of trying to placate shareholders, Dell's special committee has increased the pressure to try and secure the acceptance of the founder's buyout deal.
Written by Charlie Osborne, Contributing Writer

Michael Dell's efforts to take the PC giant private have been met with opposition from a number of shareholders, resulting in the founder meeting with large investors to try and convince them to accept the deal.

As reported by the Wall Street Journal, after months of attempts to convince investors that the company founder's $24.4 billion -- or $13.65 per share -- offer is the only way to ensure Dell's survival, the firm's special committee has pitched small investors while Michael Dell has taken on the largest shareholders.

In addition, a number of proxy firms reached out to individual investors over the weekend.

The last-ditch attempt to ensure the deal is accepted comes ahead of the upcoming stockholder meeting. The company founder, who wants to take Dell private in order to change the company's business focus, is hoping that Dell stockholders will be convinced to change earlier "no" votes or support the scheme in its entirety.

Investors that own roughly 22 percent of Dell stock, including Carl Icahn, Franklin Mutual Advisers and Southeastern, have opposed the deal publicly.

According to unnamed sources, over 20 percent of Dell shares eligible to vote have not been cast -- which count as refusal to accept the company founder's terms. However, some investors who originally voted "no" have recently reversed their positions in a tactical move -- to try and entice Michael Dell and partner Silver Lake to raise the offer.

Dell investor Carl Icahn has proposed an alternative deal; requesting that the board offer stockholders $14 per share or otherwise give investing parties a $12 special dividend and the option to hold Dell stock in the future.

Earlier this month, Dell's special committee cautioned stockholders over Carl Icahn's efforts to trump the company founder's buyout deal. The board said that Icahn's offer "misrepresents the risks and costs involved," and "involves substantial risks."

"If a sufficiently large number of shareholders seek appraisal and thus do not vote in favor of the acquisition (which is required to pursue appraisal rights), the merger agreement will be terminated, [and] the merger will not occur," the statement reads. "Stockholders will not have the opportunity to receive the $13.65 per share cash merger consideration, there will be no appraisal rights, and stockholders will continue to bear the risks of holding their Dell shares."

Icahn hopes that Dell shareholders will vote against Michael Dell and Silver Lakes' deal. The investor claims that under the terms of his proposal, stockholders "might get lucky," and completing a full review of Icahn's plans involves "no risk" and is a "no-brainer."

Dell's shareholder meeting to discuss and vote on the future of the PC giant has previously been delayed, and will now take place tomorrow.

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