Will Dell Inc (NASDAQ:DELL)’s CEO be able to bell voters?

Posted by Nathan Alexander July 24, 2013 0 Comment 621 views

All major company decisions are put before investors. In many cases, their decision can be the difference between make and break. And that is exactly the crossroad at which Dell Inc (NASDAQ:DELL)’s founder and CEO Michael Dell currently stands at. The company’s investors will be casting their vote for the proposed $24.4B buyout that has been put forth by Mr Dell.

His success has been on the balancing scale for some time now and it can tip in his favor only if he manages to prod hold-out shareholders to cast their ballots. A special Dell board committee had postponed the original vote that had been scheduled for 18 July. At that point they had felt that there was a distinct possibility of defeat.

Wooing to no avail

Two days ago, despite a concerted wooing effort by Dell and his camp members, around 18% of the eligible shareholders had still not cast their votes, said a person familiar with the issue. This works against Michael Dell as the absentees are effectively “no votes”. Around 20% of the company’s shareholders including Carl Icahn the billionaire, who had put forth an alternative proposal, stated that they oppose Michael’s bid.

There is absolutely no certainty about the outcome as investors are eligible to recast their votes till the very last minute at the meeting that is to be held at Round Rock, Texas. In order to emerge victorious, Michael Dell’s offer will have to be approved by a majority of Dell’s 740M shareholders. This excluded the 15.6% stake that the founder has in the company.

Sweet victory or bitter defeat?

Combine the high investor opposition with the absenteeism of voters and you are doomed for sure-shot failure at this point. The hard-to-get stance that is being assumed by the shareholders has a shade of brinkmanship. Some of the company’s board members are waiting for the CEO and Silver Lake Management, his financial partner, to either hike their bid or declare the current one as the best and final one. A person in the know said that the Dell camp has no intentions of sweetening the offer.

About Nathan Alexander

Nathan Alexander holds bachelor’s degrees in Journalism and European Studies from Boston University. Nathan reports round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. He has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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