Dell Special Committee Backs Silver Lake Plan

A special committee set up to evaluate takeover bids for Dell Computer says its supports the buyout offer of Silver Lake Partners for $13.65 per share. The plan was offered by both Silver Lake and Michael Dell, the founder of the company.

That plan was chosen over a special dividend of $12 per share proposed by Carl Icahn, the activist investor.

The committee, in a letter to shareholders of Dell, recommended that investors vote for the Michael Dell and Silver Lake takeover at the shareholder meeting of the company on July 18.

The announcement on Friday did not come as much of a surprise given the cash buyout’s certainty. However, it is still unknown whether Icahn will continue his campaign to have the company pay out a large dividend using cash and financing, while staying as a publically traded company.

Icahn and a number of other individual shareholders have already stated they would not support the buyout offer of Silver Lake.

A group of shareholders on Thursday sued the company claiming that Michael Dell wants to buy back the company cheaper than it is worth, because it has started to make a recovery.

Icahn says the takeover by Dell is the great giveaway and says that substantial value could be returned to shareholders.

Icahn says he expects Hewlett-Packard or Microsoft could buy the declining PC unit of Dell.

Dell has reported steep declines in earnings recently because of its weak sales in PCs. However, the earnings should be bolstered now by the increased performance of the company’s software and services divisions.

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