Dell CEO persuades board to take offer

Dell chief executive Michael Dell has regained the advantage in a lengthy battle to buy the slumping personal-computer maker he founded nearly 30 years ago. He did it by persuading the company’s board to accept a slightly better offer that adds a one-time dividend in exchange for a pivotal change in how shareholders will vote on the deal.

The latest twist in the six-month saga emerged Friday shortly before Dell was scheduled to hold a shareholder vote on the company’s proposed sale to Michael Dell and investment firm Silver Lake Partners for $24.4 billion, or $13.65 per share.

The deal to buy out the company appeared destined to fail at that price, which had been criticized by a throng of rebellious shareholders led by billionaire Carl Icahn and longtime company shareholder Southeastern Asset Management. The vote already had been delayed twice as Michael Dell’s group tried to rally support.

On Friday, Icahn said “the war regarding Dell is far from over.”

Last week, Michael Dell and Silver Lake submitted a higher bid of $24.6 billion, or $13.75 per share, but conditioned that on the company’s board revising the voting rules to make passage easier. The board rejected that.

Planning and spending on back-to-school supplies. (Tobey/The Washington Post/Source: Prosper Insgihts & Analytics survey for the National Retail Federation)

Faced with almost certain defeat on the lower bid price, Michael Dell and Silver Lake struck a new agreement Friday that further sweetened the bid. The new offer was enough to get the board to reconsider and grant the buyers’ request for a crucial revision in the voting rules.

The new arrangement with Michael Dell and Silver Lake pegs the sale price at $13.75 per share, the same amount offered last week, but stockholders also will receive a special dividend of
13 cents per share under the new arrangement. That would cost about $230 million, based on Dell’s outstanding stock of
1.76 billion shares.

Dell called Friday’s meeting to order and quickly adjourned it without a vote. With the third postponement, the vote is now scheduled for Sept. 12.

— Associated Press

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— From news services

Coming Next Week

l  In Sunday Business: The rise of Promontory, a law firm that Washington built.

l  On Monday: Institute for Supply Management’s non-
manufacturing index for July released at 10 a.m.