Dell Shareholders Favor $25 Billion USD Merger
September 12, 2013 4:26 PM
Michael Dell can finally take his company private with Silver Lake Partners
Michael Dell, founder of Dell Inc., has been trying to
take the company private
for a while now, and it looks like he has succeeded.
Dell's shareholders approved Michael Dell's $25 billion offer to take the company private. He'll acquire the company along with global technology investment firm Silver Lake Partners.
Dell stockholders will receive $13.75 in cash for each share of Dell common stock they hold. They'll also receive payment of a special cash dividend of $0.13 per share, for total of $13.88 per share in cash.
“I am pleased with this outcome and am energized to continue building Dell into the industry’s leading provider of scalable, end-to-end technology solutions,” said Michael Dell. “As a private enterprise, with a strong private-equity partner, we’ll serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals.”
This is great news for Michael Dell, who wants to
take the company private
and fix it outside of the public's eye. He was also up against billionaire Carl Icahn for ownership of the company.
Back in July, Icahn provided $3.42 billion (66 percent) of the debt financing for the bid, and secured $5.2 billion total along with investment bank Jefferies & Co.
The Associated Press reported that Icahn wrote a letter to shareholders saying that he ""still thinks Michael Dell's bid to take his company private undervalues the business and freezes shareholders out of any future gains. But Icahn also said it would be 'almost impossible' to defeat that offer." Icahn announced he was backing out of the bid for Dell earlier this week.
The transaction should be completed before the third quarter of Dell’s fiscal year 2014, and it will have to receive regulatory approval.
Dell will continue to be headquartered in Round Rock, Texas.
Michael Dell is taking the company private for good reason. It lost one-third of its value last year alone. PC sales are slow since PC demand can't keep up with that of mobile devices, and Dell has to hear about its financial failures from shareholders each quarter.
In May, the company reported a 79 percent
decline in profits
, with net income falling to $130 million from $635 million compared to the same quarter of 2012. This is mainly due to a shrinking PC market.
"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer
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