A Game of Chicken at Dell as a Proxy Adviser’s Report Looms
As a shareholder vote on the proposed buyout of Dell Inc. approaches, its founder, Michael S. Dell, and the investment firm Silver Lake are standing firm, not raising their $24.4 billion offer.
While they strongly believe that their bid of $13.65 a share is full and fair, the two also appear to be staring down Institutional Shareholder Services, the biggest proxy advisory firm.
I.S.S. is likely to publish its recommendation on the management buyout, which shareholders will vote on July 18, within the next week. Advisers to both the buyers and to a special committee of Dell’s board assume that the report is likely to be unfavorable to the deal, potentially dealing a huge blow to its chances of success. That, however, could serve the interests of Mr. Dell and Silver Lake.
Mr. Dell, who owns a 16 percent stake, is trying to take the company private, and is facing an alternative proposal by the billionaire Carl C. Icahn and the asset management firm Southeastern Asset Management. Their proposed buyback of 1.1 billion shares at $14 each values Dell at about 12 times earnings before interest, depreciation and amortization.
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