Dell founder stands firm on buyout offer as vote delay mulled

Dell founder Michael Dell and his private equity partner Silver Lake would not raise their US$24.4 billion (HK$189.3 billion) bid for the world’s No. 3 PC maker even if a vote on their offer is delayed, two people familiar with the matter said.

The outcome of a shareholder vote scheduled for Thursday on the offer is too close to call. Dell may decide to delay the vote to gain time to win support for the deal, a person familiar with the matter said earlier.

With a nearly 16 per cent stake in Dell and ties going back three decades to the creation of the company out of his college dorm room, Michael Dell is seen as having much more at stake in the deal going through than Silver Lake, a financial investor that often walks away from deals.

During late-stage negations leading up to the Feb. 5 buyout agreement, Michael Dell had to subsidise the returns of Silver Lake, which declined to raise its contribution further. The Dell founder agreed to roll over his shares at US$13.36 each versus the US$13.65 offered to shareholders.

But the two people with knowledge of Michael Dell’s and Silver Lake’s plans said on Tuesday that any decision to increase the offer now would be taken jointly and that both parties have decided there will not be any bump in their US$13.65-per-share offer.

Activist investor Carl Icahn has spearheaded opposition to the bid and presented a proposal of his own with Southeastern Asset Management, although this will not go to a vote on Thursday.