Dell acquisition gets green signal from shareholders for $24.9 billion

Dell founder Michael Dell and investment firm Silver Lake Partners received shareholders okay to buy Dell for $24.9 billion.

Dell stockholders have approved a proposal in which Michael Dell, Dell’s founder, will acquire Dell in partnership with global technology investment firm Silver Lake Partners.

Three days back, Activist investor Carl Icahn said he was bowing out of an effort to block founder Michael Dell’s proposed buyout of Dell.

Earlier, Microsoft said it would offer $2 billion loan for a deal between Michael Dell, founder of Dell, and investment firm Silver Lake, in the management buyout of Dell for $24.4 billion.

Today’s announcement is based on a preliminary vote tally from the special meeting of stockholders, Dell announced today.

Dell stockholders will receive $13.75 in cash for each share of Dell common stock they hold, plus payment of a special cash dividend of $0.13 per share to stockholders of record as of a date prior to the effective time of the merger, for total consideration of $13.88 per share in cash.

The agreement also guarantees the regular quarterly dividend of $0.08 per share for the fiscal third quarter would be paid to holders of record as of a date prior to closing.

Dell buyout okay

Recently, Blackstone Management Partners decided to pull out of its earlier plan to buy Dell primarily due to adverse market conditions.


Blackstone decided to pull out earlier due to unprecedented 14 percent market decline in PC volume in the first quarter of 2013, its steepest drop in history, and inconsistent with Management’s projections for modest industry growth; and the rapidly eroding financial profile of Dell have prompted Blackstone to pull out of the buyout talks.

At present, the IT industry is not expecting an immediate recovery in the global PC market. PC shipment, according to an IDC report in March, will decline 1.3 percent in 2013 as well. IT budgets were adversely affected by disappointing holiday sales, a lukewarm reception to Windows 8 and continuing economic malaise. The second half of 2012 suffered a year-on-year decline of 8.3 percent in fourth quarter shipments.

“I am energized to continue building Dell into the industry’s leading provider of scalable, end-to-end technology solutions. As our company continues to expand its enterprise solutions and services business, our team members will be Dell’s most valuable asset and the key to our future success,” said Michael Dell, chairman and CEO of Dell.

The transaction is expected to close before the end of the third quarter of Dell’s FY2014, subject to the satisfaction of customary closing conditions, including regulatory approval.

Approval from shareholders will end a series of negotiations between Dell founder and investors and shareholders. Dell hopes to bring more energy into the computing market in coming months.

Baburajan K
[email protected]

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