Dell Inc (NASDAQ:DELL)’s buys time with additional 10 cents per share
On Wednesday, Michael Dell raised his offer for the floundering company. He wants to take the company private and is clearly seeking shareholder support. The company’s shareholders were about to cast their votes on the earlier$13.65/share offer and the 10 cent/share increase news came in just hours prior to that. But the money is not just bait, it has a glitch.
The demand is that the fate of the offer will be decided only by the shareholders who choose to exercise their right to vote. This will not include those who have opted not to cast their votes at all. Previously, non-voting shareholders were considered to be opponents of Dell’s proposal.
DELL has delayed its shareholder meeting for the second time in a fortnight and has now postponed it to 2 August. This time is considered to be enough for the board committee to consider Michael Dell’s offer. The meeting has been put off from its prior date on the pretext that there was insufficient shareholder support.
Dell’s camp wants the conditions for approval to be altered. They are asking that a majority approval, excluding Dell’s stake be considered for the proposal. Under the existing terms, the group requires a majority of all the outstanding shares of the company irrespective of whether they have been voted or not, to vote in its favor.
Originally, the group had given the committee of the board until Wednesday to respond to their offer. However, this has now been extended till 2 August which is the day that the shareholder votes will be cast. In a letter to the shareholders of the company, Michael Dell and Silver Lake management said that they feel that this change is reasonable and fair to the rest of the shareholders. This is especially in view of the fact that they have now added 10 cents/share to the offer. Only time will tell if Michael Dell’s time-buying tactics will bear fruit.