Dell agrees to $24.8 billion buyout by Michael Dell
02 August 2013
Dell Inc's special committee and a group led by its founder and chief executive Michael Dell have agreed to take the technology giant private in a $24.8 billion buyout deal, Dell said today.
The special committee said the revised definitive merger agreement with Michael Dell and Silver Lake Partners increases the aggregate value to unaffiliated shareholders by at least $350 million.
The revised offer increases the purchase price of Dell to $13.75 per share from $13.65 per share offered earlier.
It also provides for payment of a special dividend of $0.13 per share at or before closing of the deal and guarantees the third quarter dividend of $0.08 per share.
Dell shareholders would be entitled to three regular quarterly dividends of 8 cents per share totaling 24 cents, since the first deal was announced on 5 February.
The guarantee of the third quarter dividend will potentially increase the total consideration payable to unaffiliated stockholders by an additional $120 million, depending on whether the closing would otherwise have occurred prior to the record date for that dividend, the special committee said.
In return for the increased value to shareholders, the voting standard has been modified such that the improved transaction will require approval by the majority of disinterested shares actually voting on the matter, the committee said.
The committee intends to establish a new record date of 13 August 2013 for shareholders eligible to vote on the transaction at the special meeting which will be adjourned from 2 August 2013 to 12 September 2013 at 9:00 am Central Time.
The amended transaction also includes a reduction of the breakup fee that would be payable in the event the merger agreement is terminated and within 12 months thereafter the company effects a recapitalisation transaction that does not result in there being an absolute majority stockholder of the company.
The breakup fee stands reduced from $450 million to $180 million.
Alex Mandl, chairman of the special committee, said, "The committee is pleased to have negotiated this transaction, which provides as much as $470 million of increased value, including the next quarterly dividend that will now be paid regardless of when the transaction closes.''
Mandl continued, ''We believe modifying the voting standard is in the best interests of Dell shareholders, both because it has enabled us to secure substantial additional value and because it provides a level playing field for the decision facing shareholders.''
The revised definitive merger agreement has been approved by Dell's special committee and by the independent members of Dell's board of directors.