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Dell vote deadline looms

No decision announced on whether buyout ballot will be delayed

The shareholder vote on Michael Dell’s go-private proposal is too close to call.
The shareholder vote on Michael Dell’s go-private proposal is too close to call.

Hours before Dell Inc shareholders are due to vote on the future of the world's number-three PC vendor, no decision has yet been reached on whether the vote will occur as scheduled or be delayed so the company's board can rally more support for CEO Michael Dell's go-private proposal, Reuters reported.

Dell, who is also chairman, and his co-bidder Silver Lake Partners, have tabled an offer for $13.65 a share, in the hope that stakeholders will jump at the chance to drop holdings in a company that responded weakly to the surge in demand for mobile devices. Shareholder approval of the offer would mean a $24.4bn payout from the Silver Lake consortium and would allow Michael Dell to focus on a new enterprise-centric business approach that would phase out the company's reliance on hardware shipments. A delisted venture would remove public scrutiny while the company's management experiment with the new model.

But the Dell-Silver Lake group faces resistance from investor Carl Icahn and Southeastern Asset Management, both major shareholders, who believe the current bid undervalues the company. Icahn and Southeastern have prepared and announced a counter offer, but it has yet to be formally presented to shareholders as the vote on the Dell-Silver Lake bid is still pending.

If the vote does not go Michael Dell's way, it is likely that a proxy fight will develop. Icahn has previously presented a list of nominee directors for a new board and a roster of candidates for the position of CEO. He will push for an early shareholder meeting and if he is able to oust Michael Dell, Icahn will be able to present his counter proposal.

Another possible outcome from an unfavourable vote is an improved offer from Silver Lake and Dell. While two insiders recently told Reuters a delayed vote would not lead to any change in the $13.65 bid, it remains unclear what the bidding partnership would do to confront a majority of naysayers.