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Dell sweetens bid to $24.6 billion, board delays vote to Aug. 2

July 24, 2013|By Andrea Chang
  • Company founder and Chief Executive Michael Dell has increased his bid for the PC maker.
Company founder and Chief Executive Michael Dell has increased his bid… (Paul Hilton / Bloomberg )

Michael Dell, facing the possibility that he would lose the company he founded to billionaire Carl Icahn, announced a last-minute increase to his buyout offer.

Under the new proposal made public Wednesday, Michael Dell and investment firm Silver Lake would acquire the PC maker for $13.75 per share in cash, up from the group's previous offer of $13.65 per share. That bumps the value of the bid to $24.6 billion, up from $24.4 billion.

In another twist, Michael Dell is seeking to change the shareholder voting rules in an effort to better secure the success of his bid. Currently, a share not cast counts as a "no" vote; the company founder wants the outcome of the vote to depend solely on actual votes cast.

The group said it was not willing to discuss any further increase to its bid without the change to the voting rules.

"This is our best and final proposal," it said in a letter to members of Dell's special committee. "There is simply no rational basis for shares that are not voted to count as votes against the merger agreement."

Dell's board of directors said that in light of the new bid, it would delay a shareholder meeting from Wednesday afternoon to Aug. 2 at 7 a.m. PDT at the company's headquarters in Round Rock, Texas.

The special meeting of shareholders had been delayed once before. Last week, Dell postponed it after it appeared Michael Dell's plan to take the PC maker private would not be approved by shareholders.

The saga over the future of Dell began in February, when Michael Dell, who is also chief executive, announced his plans to take the company he founded private amid prolonged struggles in the PC industry.

But his bid was met with a competing offer from Icahn, a billionaire activist who has repeatedly said Michael Dell is undervaluing the company.

In Icahn and Southeastern Asset Management's recently modified offer, announced this month, Dell shareholders would receive $14 a share and a warrant for every four shares that they tender. The warrants could be used to purchase Dell shares for $20 in the future.

Shares of Dell were down less than 1%, to $12.78, at 11:45 a.m. PDT.


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