Michael Dell sweetens deal, secures voting rule change

Dividend offer seals committee approval; Icahn sues

Tags: Dell CorporationMergers and acquisitionsUSA
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Michael Dell sweetens deal, secures voting rule change Michael Dell has secured the change in voting regulations that he needs to push his buyout offer through. (Getty Images)
By  Stephen McBride Published  August 5, 2013

Dell Inc CEO Michael Dell this weekend convinced the company's special committee to change shareholder voting rules, Reuters reported.

Dell won the committee over by proposing a new sweetener for shareholders that would pay a dividend of 13 cents per share on top of the already elevated buyout offer of $13.75 a share.

Shareholder abstentions had previously threatened to derail Michael Dell's attempt to take private the company he founded in 1984 in his college dorm room. Because abstentions were counted as "nay" votes under old voting rules, insiders had said Dell and his bid partner Silver Lake considered it unlikely that they could amass enough support to push their bid through. Shareholder meetings have been postponed three times amid fears that the Dell-Silver Lake proposal would be voted down.

Michael Dell wants a future for the company away from public trading, so he can build a different kind of business - one that does not rely on selling PCs, for which demand has dwindled in favour of mobile devices. He has argued for an IBM-style enterprise services model. His main opponent, Carl Icahn, who holds an 8.7% stake in the company, is intent on keeping Dell Inc publicly listed and has teamed up with Southeastern Asset Management to block the Dell-Silver Lake bid.

In an attempt to overturn the committee's decision on voting regulations, Icahn is now suing Dell Inc, in Delaware, where the company is registered.

Dell shares were up 5% at $13.61 in afternoon trading on Friday.

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