Dell urges shareholders to back founder Michael Dell's offer
01 June 2013
Dell today again urged shareholders to allow sale of the company to billionaire founder Michael Dell and private equity shop Silver Lake Partners, prompting the activist investors opposed to the deal to step up their campaign to scuttle it.
In new proxy materials filed with the SEC, Dell reiterated that the $24.4 billion Dell-Silver Lake buyout was the best option even as it dimissed the activists' proposal for a leveraged recapitalisation and set 18 July as the date for shareholders to vote on the sale.
In a letter to shareholders, Dell, after contacting 21 strategic and 52 financial buyers during the go-shop period, said it had reviewed all alternatives to the proposed $13.65-a-share Dell-Silver Lake deal, which seemed to be the best option.
''Our analysis led us to conclude unanimously that a sale to the Michael Dell/Silver Lake group for $13.65 per share is the best alternative available - in a challenging business environment it offers certainty and a very material premium over pre-announcement trading price,'' the company wrote.
Dell further pushed the idea that the buyout would eliminate any possibility of further erosion of the company's fortune and harm to existing investors, instead transferring those risks to the buyout group.
According to Dell, it ''considered the merits and feasibility of a leveraged recapitalisation,'' which was the type of deal that billionaire Carl Icahn and his partner Southeastern Asset Management suggested. Earlier this month, Icahn and Southeastern proposed a $12 a share or cash leveraged recap that would cost over $21 billion, leaving the company public, and allowing shareholders who, like Icahn and Southeastern, believed the turnaround could be more easily accomplished than Michael Dell suggested.