Michael Dell, who threw his full support behind a controversial $24.4 billion bid to take his PC-and-server company private, now says he’ll stick around even if that deal, also backed by Silver Lake Partners, fails. But, he will not support an asset sale or a leveraged recapitalization of the company as financier Carl Icahn, who opposes this buyout, has proposed, he told the Wall Street Journal. Icahn says the take-private move undervalues the company.
Under a recapitalization, the company would probably borrow money and make a cash payment to investors.
According to the Journal, Dell wrote:
“I will not support the kind of recapitalization and sale of assets some shareholders are suggesting … Given where we are today, I believe the challenges we would face as a public company, including a potential proxy fight, would be significant. But I am ready to fight and I am committed to doing what I believe is right for the company.”
Last week, a special shareholder’s meeting to vote on the buyout was convened then quickly adjourned and rescheduled for July 24. That was seen as a tacit acknowledgement that Dell-Silver Lake did not have enough votes. Southeastern Asset Management and T. Rowe Price are among other investors opposing the bid.
Dell and Silver Lake sweetened the pot a bit — 10 cents to $13.75 per share — but with strings attached. That offer is contingent on the special committee changing how votes are counted. Under the current plan, any abstentions would count as “no” votes. Dell and Silver Lake now propose that only votes that are actually cast be counted. (Mr. Dell’s votes will not be counted.)
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