Mr. Dell offers an additional 10 cents per share, but with a caveat for Dell Inc., (NASDAQ:DELL)
Denver, CO, 07/25/2013 (Avauncer.com) – Shares of Dell Inc., (NASDAQ:DELL) rose 0.27% to close at $12.91 in its last trading session. This was close to the higher range of its 52-week price range of $8.69 to $14.64.
This was after Michael Dell and its partner in the deal Silver Lake agreed to raise their offer price by 10 cents to $13.75 per share in cash. This means an additional burden of $150 million to take the deal value to $24.4 billion. This however came with a pre-condition to bring a change in the voting rules that will determine the buyout process. The condition being that shares of unaffiliated stockholders who do not vote at the special merger meeting should be ignored, thereby not being considered for the deal.
Doing this, the company has bought itself time till August 2, as the Special Committee of the Dell Board will be assessing the new offer. Mr. Deal needs the support of atleast 52% of outstanding shares for the deal to happen.
The deal has not been a smooth one, with activist like Carl Icahn and the advisory firm Southeastern Asset Management Alleging that the deal is underpriced. This has resulted into a deadlock between Mr. Dell and the Carl Icahn, where the later is seeking higher price for the offer. Also, with Mr. Icahn threatening to have the Board replaced, the Special Committee to seem to have favored Mr. Dell in his buyout scheme. The Special Committee has already disappointed Mr. Icahn by rejecting his extension of financial support of a $15.6 billion, valuing the company’s share at $14 per share. This was justified by the fact that the company would expose itself to greater financial risks, which is already battered by a declining PC industry, along with changes in technology space.
Despite Mr. Dell and his affiliates holding 16% stake in the company, they cannot cast the vote as per norms, which is a major hindrance in his efforts to take the company private.