Michael Dell wins fight to take PC maker private
The PC maker's founder wins approval from main shareholders for a US$25 billion buyout
Michael Dell yesterday clinched shareholder approval for his US$25 billion offer to buy and take Dell private, ending months of conflict with the company's largest investors and removing the uncertainty surrounding the world's No 3 personal computer maker.
Shareholders cast their votes at a special meeting in Austin, Texas. Based on preliminary results, the buyout won their go-ahead and the deal is expected to close before the end of Dell's fiscal third quarter.
The company's pace of internal transformation should now quicken. Sealing the deal should also assuage customers who have grown wary of the company's direction during a very public battle that pit major Wall Street players Icahn, Southeastern Asset Management and T Rowe Price against the chief executive.
"Once the deal is consummated, they can move on and close some of the large infrastructure deals they've been working on. I do think there's been a bit of a pause," said Cross Research analyst Shannon Cross.
Dell, who founded the company from a college dorm-room in 1984, and partner Silver Lake fought for months to convince sceptical investors his offer was the best option. This week, he gained the upper hand after one of his staunchest opponents, activist investor Carl Icahn, bowed out of the conflict because he said it was "impossible to win".
Dell reported a 72 per cent slide in quarterly earnings last month, reflecting price cuts intended to soothe nervous customers and spearhead a foray into the enterprise market.
Dell has argued that revamping his company into a provider of enterprise computing services in the mould of IBM is a complex undertaking best done outside the public markets.
It remains to be seen if Dell can build its storage, networking and software portfolios to vie with Hewlett-Packard and others. Some analysts think it may be too late, with a large swathe of the corporate market locked up by IBM and HP. But with the personal computer market expected to shrink again this year, investors say the company has little choice.
Dell has become a prominent victim of market erosion from mobile devices.