Michael Dell One Step towards Approval for Buyout Deal

Silver Lake PartnersMichael Dell got the approval from the board’s special committee. This could lead the way for Dell to go private in a deal that was said to be worth $24.9 billion. The company’s shares increased 5 percent in trading as investors bet on the new value proposition.

CEO Dell and Silver Lake Partners made the terms of the deal better. They increased their offer with the special committee of the Dell’s board, just as they face legal opposition by billionaire investor Carl Icahn.

The board’s special committee agreed to change the voting rules so votes that are not casted would not be counted as no-votes. The move places Michael Dell a step closer into getting shareholder approval. The company is set to hold a shareholder meeting to vote on the new offer on September 12.

Dell has seen massive declines when consumer interests went from traditional personal computer to mobile devices. Founder Dell gave out a privatization plan that would reduce the company’s emphasis on PCs and go into higher-margin businesses.

CEO Dell and the investors have offered $13.75 per share as well as a special dividend of 13 cents a share upon the completion of the deal. The agreement also guarantees a third quarter dividend of 8 cents per share that will be given on or before the close of the deal. The offer has improved the value of the deal by $470 million.

Michael Dell’s latest proposal is an attempt to get the favor of the shareholders for votes as he faces legal opposition from Icahn. The shareholder opposed the deal and argued that an alternative deal to stay public is better for all shareholders.

The revised offer from Dell has a reduced kill fee from $450 million to $180 million if the deal collapses. The lowered fee has raised some questions over confidence of the deal’s completion.

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