Dell Asks Shareholders To Support Silver Lake Deal


Perhaps anticipating a proxy fight from Carl Icahn and Southeastern Asset Management, Dell's special committee issued a letter to shareholders Friday, urging them to approve the proposed $24.4 billion leveraged buyout with Silver Lake Partners and Michael Dell at $13.65 per share.

A special meeting of stockholders is scheduled for July 18, when the vote will occur, according to the letter.

"Having conducted a thorough and probing review of Dell's challenges and opportunities, we believe that the risks and uncertainty of a stand-alone public company are high and that the transaction we have negotiated offers superior value for Dell stockholders," wrote the special committee in the letter. "We unanimously recommend that stockholders vote to approve the transaction by voting 'FOR' the Michael Dell/Silver Lake merger agreement at the Special Meeting of Stockholders."

Related: Dell Dozen: Who Are The Icahn/Southeastern Dell Board Nominees?

Michael Goldstein, president of LAN Infotech, a Fort Lauderdale, Fla.-based solution provider, hopes the July 18 vote will put an end to the months-long issue.

"I think this is a big push to get the deal moving. This has been a long time coming," Goldstein said.

The committee points out that Dell has faced "deteriorating market conditions" and that the deal shifts "very substantial risks" to the buying group.

Further, the committee argues, $13.65 per share is a 37 percent premium over the 90-day average price for the stock before reports surfaced that a deal was in the works.

"We are fully convinced that this significant, immediate and certain premium is superior to owning Dell as a stand-alone entity today -- with or without a leveraged recapitalization -- as well as to the other strategic and financial alternatives potentially available," the committee wrote.

In contrast, a group led by Icahn and Southeastern Asset Management have argued for a recapitalization in which shareholders would receive $13.65 per share, or $12 in cash and the option to hold shares worth $1.65. Icahn has gone so far as naming 12 nominees to replace the current board of directors should shareholders approve that deal.

Dell's special committee responded by asking Icahn and Southeastern for more details on their proposal, particularly how it would be financed.

PUBLISHED MAY 31, 2013