ISS recommends vote for Dell founder’s offerThe Associated Press | July 09,2013AP Photo
Dell CEO Michael Dell at a conference in San Francisco in this file photo. A top proxy firm recommended Monday that Dell shareholders vote in favor of a deal that would allow the company’s founder and an investment firm to buy it and take it private.NEW YORK — A top proxy advisory firm is recommending that Dell shareholders vote in favor of a deal that would allow the company’s founder and an investment firm to buy the computer maker and take it private.
Michael Dell and Silver Lake Partners have offered to buy Round Rock, Texas-based Dell Inc. for $13.65 per share, or a total of $24.4 billion. Michael Dell believes he can turn the company around by taking it private and diversifying into niches, such as business software, data storage and consulting.
But Carl Icahn, a billionaire investor and Dell’s second-largest shareholder, says he wants Dell to remain publicly traded and boost value for shareholders by buying back $16 billion in stock.
The company has backed Michael Dell’s proposal and said that Icahn doesn’t have adequate financing for his plan. Shareholders will vote on the buyout offer at the company’s annual meeting July 18.
In its report, Institutional Shareholder Services pointed to the offer’s hefty premium, about 26 percent over the company’s share price before the offer became public, and the certainty that comes with an all-cash bid.
ISS said that if shareholders don’t take the offer, they have to be willing to continue to hold shares in Dell as it continues to transform itself amid the risks of a still deteriorating personal computer industry.
The special committee of Dell’s board evaluating the company’s options said in a statement that it was pleased with the recommendation, noting that it believes not going forward with the sale would expose the company and its shareholders to “serious risks” that would further reduce the company’s value.
Icahn said Sunday that he believes Michael Dell is trying to buy the company he founded at a “bargain price.” He reiterated the benefits of his alternate proposal, which would involve the repurchase of up to 1.1 billion Dell shares at $14 apiece.
On Monday, Icahn and his ally, Southeastern Asset Management, said in a statement that they would vote against the buyout offer being supported by Michael Dell.
“We continue to believe that Dell’s owners deserve better,” they said in the statement.
Icahn’s plan would be funded with $5.2 billion in debt, $7.5 billion in Dell cash and $2.9 billion from the sale of Dell receivables. Icahn has said he and his affiliates have $5 billion in existing equity and proposed debt financing to help fund their proposal.
Dell shares rose 41 cents, or 3.1 percent, to $13.44 in trading on Monday — 21 cents below the offer price of $13.65.MORE IN National / World BusinessBOSTON — Wynn Resorts and Massachusetts gambling regulators on Wednesday finalized a license for ... Full StoryWASHINGTON — Amid action in Congress to intensify the fight against Islamic State militants,... Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: Dutch father of microbiology Antonie van Leeuwenhoek discovers the existence of one-celled organisms; in 1967, The Doors are booked to play the Ed Sullivan show; in 1858, freedom fighter Dred Scott dies on this day in St. Louis.
- TOMORROW'S HEADLINES TODAY: No money this year for western rail project, Lola Aiken memorialized in Montpelier, Supreme Court Castleton murder suspect will remain in jail, Shaftbury man fires shots from his AK-47 into neighbor's home.
- RICHARD'S POOR ALMANACK: On this day in 1959, Soviet Premier Nikita S. Khrushchev arrives in U.S. for historic 13-day visit; in 1987, Secretary of State George Shultz and Soviet Foreign Minister Eduard Shevardnadze sign nuclear reduction agreement.
- TOMORROW'S HEADLINES TODAY: City celebrates completion of its newest mural, on West Street opposite the post office, more than $2 million in federal grants will bolster Vermont's health centers, Patrick McArdle reports on pending sale of Vermont papers.
- RICHARD'S POOR ALMANACK: Henry Hudson sails up the Hudson River as far as present-day Albany, Leo Szilard has epiphany waiting for the light to change, 3 kids report a West Virginia close encounter in 1952.
- TOMORROW'S HEADLINES TODAY: Who will run for mayor in Rutland next year? Has Bennington overcome its fear of twerking? Documentary 'Hungry Heart' packs the Paramount, and the city's Creek Path scores another million-plus dollars.