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Dell Committee Accepts Revised Bid as Icahn Sues To Block Changed Vote Date

Ahead of Friday's scheduled vote  -- or should I say re-scheduled scheduled vote -- Dell's Special Committee accepted last week's revised bid from founder Michael Dell and his investors led by Silver Lake Partners.

Consequently the vote was once again rescheduled until Sept. 12. Michael Dell and Silver Lake agreed in return to not require that shares not cast count as "no" votes, a sticking point over last week's revised bid. The committee also agreed to reduce the breakup fee to $180 million from the original $450 million.

"The Committee is pleased to have negotiated this transaction, which provides as much as $470 million of increased value," said Alex Mandl, the committee's chairman, in a statement posted this morning. "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 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."

That alternate proposal was the $12-a-share bid led by investor team Carl Icahn and Southeastern Asset Management (which actually values at $15 to $18 a share because shareholders would retain a portion of their shares after receiving a payout). Icahn and his team fear Dell's offer undervalues the company. Icahn last week filed a lawsuit on Delaware Chancery Court in Wilmington, Del. to block the vote change. Icahn and his investors are aiming to replace the entire Dell board and Michael Dell as CEO.

It appears (so far) that the revised offer from Dell-Silver Lake has a better chance of succeeding than it did before they upped their offer. But anything can happen over the next month and Icahn isn't throwing in the towel just yet.

By going private, Dell and Silver Lake argue they can be more competitive by not having to disclose information, while allowing the company to make long-term bets that may not pass muster with the scrutiny of public shareholders.

So the battle continues.

Posted by Jeffrey Schwartz on 08/05/2013 at 1:28 PM


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