losing cred after postponing buyout vote
By Josh Kosman and Mark DeCambre
Last Updated: 1:31 AM, July 19, 2013
Posted: 11:52 PM, July 18, 2013
Dell’s board is starting to
have a big credibility problem.
Complaints from shareholders, which had quietly piled up over recent
weeks, roared out loud yesterday after Dell’s special committee
decided to postpone the vote on a $24.4 billion buyout.
The major gripe? That the committee was losing sight of shareholders
in favor of one in particular — Michael Dell.
“The only reason to delay [the shareholder meeting] is because the
votes aren’t there to get it done,” noted Richard Pzena, a New York
investor in Dell, referring to the committee’s decision to scuttle
yesterday’s shareholder vote on Michael Dell’s offer — and move it to
That’s Carl Icahn
(above) showing up Michael Dell as the battle for ownership of
the computer giant goes into overtime.
Like Pzena, a slew of
shareholders, including Carl Icahn and Southeastern Asset Management,
have been griping that the committee — headed by Alex Mandl — was too
quick to fall in line behind founder Dell’s $13.65-a-share Silver
Lake-backed bid to take the computer company private.
The vote yesterday — with
the tally running strongly against Michael Dell — was postponed
minutes before it was going to be finalized at the PC-maker’s Round
Rock, Tex., headquarters.
Gary Lutin, a consultant at
Shareholder Forum, said “M&A professionals are amazed to see a
supposedly unbiased special committee hiring public relations advisers
and doing road shows to pitch a deal. Their antics seem to be focused
only on proving they have no personal legal liabilities instead of on
the real interests of either the company or its shareholders.”
The committee seemed to
ignore shareholder unrest and, in a statement, pinned the anxiety
solely on Carl Icahn, who has been leading the charge against the
offer — claiming Michael Dell is looking to get the company on the
“We wish to note that it is
unfortunate Mr. Icahn continues to conduct his campaign by trying to
discredit the special committee and accuse it of frightening Dell
stockholders,” the committee said.
With Michael Dell not
voting his 16 percent stake, proponents of the buyout offer needed 42
percent of shareholder to approve the deal. They failed. Roughly 30
percent abstained — which counted as a “no” vote.
The committee is expected
to use the extra six days to woo shareholders — likely telling them
the offer isn’t going to be raised. Some, perhaps engaging in extreme
gamesmanship, floated the idea of a 50-cent special dividend to entice
One index investor said,
“What you are hearing is something [the dividend] that is plausible,
and my guess is if they take that step it will be in response to
testing it with some fence-sitters first to see if that would win them
The buyout battle, waged
over six months, has, in some views, also left the Dell committee
vulnerable if the buyout does not succeed.
One Dell analyst,
requesting anonymity, said the special committee has been so bearish
in its forecasts for the company as it tried to get shareholders to
vote for Michael Dell that he will have to change his projections if
the buyout fails.
Meanwhile Icahn is trying
to sign up a big-name executive this week who he could announce would
run Dell under his leadership.
2013 NYP Holdings, Inc. All rights reserved.