Dell Inc (NASDAQ:DELL) caves-in to CEO’s wishes, bends rules
At the end of last week, Dell Inc (NASDAQ:DELL) and Michael Dell finally clinched a new deal. This was a boost to the previous bid. A special dividend offer was also added to the deal to sweeten it further. This development will hopefully bring all the months of haranguing to an end. Michael Dell faced heavy opposition from several heavy-duty investors in the company such as Carl Icahn, the billionaire.
The new deal
The new agreement is inclusive of a 13 cents/share special dividend in addition to the 10-cent rise in sale price to $13.75/share. In lieu of this, the company has agreed to bend the rules for Michael Dell and Silver Lake Management. Absentee voters will no longer be counted as opposing votes. This is a big win for the founder’s camp. The company’s stock price increased post this announcement.
The opposing investors
Despite this development, Icahn who has accumulated 8.7% stake in the company and had stanchly opposed Dell’s buyout offer has vowed to continue fighting. In a statement, he said that though the shareholders have won a battle, the war is far from finished. He said that they are still dissatisfied about the fact that the increase is such a measly one and that it is an insult to the shareholders. The billionaire has also gone to the extent of suing Dell Inc in a court in Delaware in an attempt to block these changes to the company’s voting rules.
The struggle continues
This lengthy battle has done a lot of harm to the company in terms of the uncertainty that the investors now harbor about it. It hasn’t really done much more than being detrimental to a company that has been struggling to stay afloat in the rapidly diminishing PC market. The company is trying to metamorphose into an enterprise similar to IBM. Michael Dell and Silver lake Management say that the only way this restructuring can be successful is if the company operates as a private entity and is hidden from market scrutiny.