Dell CEO Told to Boost Offer Value or Lose Chances of Going Private
July 3, 2013 11:13 AM
comment(s) - last by
ISS hasn't made a final decision yet, but the odds seem stacked against Michael Dell for now if he doesn't provide a better offer
The founder and CEO of Dell Inc. could
lose his company
if he doesn't heed the warnings of a special committee of the board.
Michael Dell, who founded Dell Inc. in 1984, is trying to take the computer company private, but Dell's second largest shareholder -- Icahn -- is making that a bit more difficult with an investment-backed proposal of its own.
Dell, which is being backed by buyout partner Silver Lake Management LLC in this process, was told to up his offer from $24.4 billion in order to secure approval from investor-advisory firm Institutional Shareholder Services (ISS).
Reports have said that ISS is leaning against Dell's offer unless he increases it. Neither Dell nor Silver Lake have said whether they'll do so or not yet, but Dell's special committee of the board is pushing for Dell to make a larger offer.
Billionaire Carl Icahn, on the other hand, revealed this week that he provided $3.42 billion (66 percent) of the debt financing for the bid. Icahn, along with investment bank Jefferies & Co, have secured $5.2 billion total.
ISS hasn't made a final decision yet, but the odds seem stacked against Michael Dell for now if he doesn't provide a better offer. Banks financing the transaction are reportedly working on a contingency plan to hike up the offer now.
Dell has had a whirlwind of problems aside from issues with going private. 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.
Dell has looked into many avenues to help his company go private, such as
dropping the value
of his 16 percent stake in the company from $13.65 a share to $13.36 a share.
Back in January, Microsoft also said it would
pour $3 billion
in order to help it go private and survive.
This article is over a month old, voting and posting comments is disabled
Eh, it's just a negotiation
7/3/2013 12:37:23 PM
Have you ever seen a negotiation to go like:
- How much?
RE: Eh, it's just a negotiation
7/4/2013 7:51:35 AM
HP - How much ?
Autonomy - $10.2B
HP - Deal!
And there are plenty more...
RE: Eh, it's just a negotiation
7/4/2013 11:47:05 AM
While much inflated, I'm pretty sure that figure was negotiated, too. Badly, but negotiated.
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
Dell Profits Shrink as Contenders Battle to Buyout Company
May 17, 2013, 9:32 AM
Report: Dell Now Mulling Two New Buyout Offers
March 25, 2013, 9:52 AM
Dell CEO Reduces Value of Shares in Hopes of Company Going Private
February 14, 2013, 5:08 PM
Microsoft to Pour up to $3B USD Into Dell to Help it go Private, Survive
January 22, 2013, 2:07 PM
Tim Cook Touts Apple’s Product Portfolio, Performance in Letter to Employees
October 21, 2014, 8:05 AM
Buoyed by Strong iPhone Sales, Apple Reports Revenue of $42.1B, $8.5B in Profit for Fiscal Q4
October 20, 2014, 5:21 PM
Windows 8.1 + Android "Sell Mini PC" w/ Bay Trail Creates New PC Form Factor
October 20, 2014, 5:07 PM
OnePlus to Open Pre-orders on October 27
October 20, 2014, 1:34 PM
Apple Releases iOS 8.1; Adds Apple Pay Support, SMS Relay, Instant Hotspot
October 20, 2014, 1:00 PM
Quick Note: Android Gmail App to Gain Yahoo, Outlook Account Support
October 20, 2014, 9:15 AM
Most Popular Articles
Update: Motorola Droid Turbo Coming Oct 28, 48-hour Battery Life Confirmed
October 19, 2014, 9:19 PM
Google Announces Android 5.0 “Lollipop”, Nexus 9 Tablet, and Nexus 6 “Phablet”
October 15, 2014, 12:41 PM
Cool Science Video of the Day: Carnivorous Leech Eats Giant Jungle Worm
October 16, 2014, 6:44 PM
HBO, CBS Lead Charge to Ditch Cable
October 16, 2014, 4:40 PM
PS4 "Masamune" Update 2.0 Will Bring New Music and Customization Features
October 17, 2014, 1:05 PM
Latest Blog Posts
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information