Dell demands rule change to keep £15.6bn takeover alive

MICHAEL Dell yesterday made a last-ditch bid to win control of the computer manufacturer that bears his name, as he attempts to bring a six-month takeover saga to a close.

Dell’s decision to up his existing $24.4bn (£15.6bn) offer by $150m – in return for changing vote rules to make it more likely to succeed – was made just hours before shareholders were due to decide on the previous bid at a meeting in Texas. A new vote has been scheduled for 2 August.

Carl Icahn, the substantial Dell shareholder who has spent most of 2013 trying to block the buyout, last night reverted to rhyme to express his exasperation with the last minute intervention by the company founder.

“All would be swell at Dell if Michael and the board bid farewell,” the Wall Street veteran said.

Michael Dell is working with private equity firm Silver Lake Partners on the proposed deal, which would be one of the largest leveraged buyouts in history.

Under the terms of last night’s revised offer only shareholders who bother to vote on the deal will count towards the final verdict. It had previously been agreed that shareholders who abstain from the poll would be counted as votes against the deal.

A delegation of Dell directors has been given until the end of today to decide whether they will accept the requested change in voting rules.

“The will of the majority of the unaffiliated shares voting on the transaction should not be thwarted by an unfair standard that counts unaffiliated shares not voting as ‘no’ votes,” Michael Dell and Silver Lake said in a statement.

Last week a previous attempt to hold a vote on the Michael Dell and Silver Lake buyout offer was abandoned when it became clear that it would fail to attract the required shareholder support. Investors who have voted so far have been split down the middle on the deal, meaning the abstentions are expected to be crucial.

Icahn, who made his name as a corporate raider in the 1980s, yesterday said the proposed change to voting rules is an “outrageous” attempt to remove a provision that is designed to protect shareholders. He repeated his contention that not only does the offer “undervalue the company” but also “freezes out loyal stockholders”.

If the latest offer collapses it could make the board’s position untenable and leave Dell, who continues to serve as both chairman and chief executive while owning 15 per cent of the company, facing an uncertain future.

The latest offer is equivalent to $13.75 a share. Yesterday the company closed up 0.08 per cent at $12.89.