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Dell board rejects increased buyout offer saddled with voting changes

updated 07:30 pm EDT, Wed July 31, 2013

$0.10 increase not sufficient to change terms of the vote

Ten days before the next scheduled privatization vote for Dell driven by Michael Dell and Silver Lake, the company's special committee has rejected a proposal to increase Michael Dell's per-share offer to $13.75, assuming the voting rules are shifted towards favoring the proposal. Dell's increased offer hinged on votes not cast to be changed to an "abstain" status, rather than "no" votes.

Alex Mandl, the special committee's chairman, wrote in a letter to the buyout group that said "the committee is not prepared to accept your proposal. We are, however, willing to establish a new record date for a vote on a $13.75 per share transaction under the existing voting standard." In the latest head count, about 27 percent of the shares of the company had not cast a vote, and as the rules stand, will be counted as "no" votes.

Michael Dell and Silver Lake commented on the increase and the reasoning behind it, saying that "according to our latest tally, approximately 27 percent of the unaffiliated shares have not yet been voted. The presumption that these shares should be treated as if they had voted against the transaction is patently unfair. The will of the majority of the unaffiliated shares voting on the transaction should not be thwarted by an unfair standard that counts unaffiliated shares not voting as 'no' votes."

An anonymous shareholder told Reuters prior to today's result that "this is not about how to win the deal, this is about how Michael Dell exits the process. They're really putting the screws on the special committee, but I don't see how [it] can accept the conditions."

Carl Icahn and his opposing forces have not, as of yet, commented on the advisory board's rejection of the offer.

by MacNN Staff





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