Dell founder Michael Dell (Michael Dell) plans to take private sluggish computer manufacturer, is scheduled to vote on Thursday may be an indication that close late push to win shareholder support.
I believe Dell's $ 2.44 billion U.S. dollars takeover offer supporters stand a better chance of turning around, if it can make long-term strategic decisions without worrying about meeting Wall Street's fourth-quarter earnings outlook. But some big investors have hinted opposition bid. Activist investor Carl Icahn that the offer undervalues ??the company.
The decision to go private companies difficult time facing the PC industry, as people put off replacing traditional PCs, spend their own money, rather than the latest smartphones and tablets reflection. PC sales have been in decline, and tablet PCs notebook sales this year.
CEO Michael Dell, the company hopes to become a more diversified technical services, enterprise management software and high-end computer vendors - IBM, long way in the 1990s, successful transformation.
Shareholders at the company's headquarters in Texas, Round Rock, until Thursday's meeting to vote.
On Tuesday, the company sent a special committee of the board of directors a letter to shareholders, Icahn and his emphasis against Southeastern Asset Management fund the opponent's plan. In short, they have 13% of Dell.
The committee said that Icahn may fabrications $ 13.65 per share offer from Michael Dell and his group of investors, but to submit recapitalization plan, which is called the risk and short-term details. Now some cash reward shareholders, but leaving about one-third of the outstanding shares of the shareholders to benefit from successfully reversed Icahn program requirements.
Technical analyst in Austin Patrick Moorhead said: "I believe this is a very, very close vote,." "Institutional investors usually let companies know their location, so you can imagine the war room (Dell consultants) ticket."
Elections in such enterprises, the shareholders can change their voting rights until the last minute. Michael Dell (Michael Dell) becomes more difficult the task of an agreement, he will not vote his shares, representing approximately 16% of the company's stock. This means that the Board needs to Dell's outstanding stock slightly more than 42% of the accepted Michael Dell (Michael Dell) offer, in order to complete the transaction.
The company said Thursday's meeting can be called sequentially, and then quickly adjourned without taking a formal vote to the Board more time to round up support for the buyout. If the vote was postponed, analysts said Michael Dell (Michael Dell) group, and may even sweeten his offer.
In an open letter released Wednesday, the Icahn said Thursday a vote regardless of the outcome: "Can you imagine a political campaign, to promote the election of one party may wait for a better day, the elections - the date when it is hope that their vote may do better than they would have on the scheduled date of the election to do? "
It would have been hard to imagine the company bearing the name of Michael Dell faced this situation a decade ago, when it was riding high, the leading global PC sales.
This is how people with previous technology transfer. Although the company has branched out into servers, storage devices and services, it is still heavily dependent on the PC and suffered from smart phones and tablet PCs rise. Last week, research firm IDC said that in the April-June period, the global PC shipments fell 11 percent, compared to last year. Then in the first three months of this year fell 14 percent, the steepest quarterly decline since IDC began keeping records in 1994.
Dell shares have never recovered from their split-adjusted peak of nearly $ 60 in 2000 during the dot-com boom. They are about $ 18, in February 2012, when they began to slide again weakening PC shipments in the face of a new three-year high. Michael Dell started talking about the private buyout with potential partners even in the shares hit $ 8.69 in November.
Rumors of a transaction before the board high shares announced on February 5 with Michael Dell (Michael Dell) and other investors agreed. Dell board four members of the Special Committee recommends that shareholders take the buyout, he said, to minimize their risk, and give them a possible deal leaked premium over the share price before the news all in cash.
The committee said it had an altercation group and six price increases, despite contact with dozens of other potential buyers, there is no higher offer appears. A likely buyer, private equity firm Blackstone Group, dropped out of school in April, citing Dell's "quick erosion of the financial situation."
Icahn and Southeastern Asset Management, said the offer undervalued Dell, Dell's top 20 shareholders of at least four open a view that has been echoed. Icahn has suggested that the company repurchased 110 million shares at $ 14 each, and add another element last week said it will buy additional shares to shareholders warrants. He valued his plan to $ 15.50 per share for $ 18. If Icahn and Southeastern defeated the private takeover offer successful, they will seek to replace the Dell board with their own list of candidates, and put their plans, results.
Approved the three major shareholders to the company quote, Michael Dell (Michael Dell) research team get a boost.
One of them, glass, Lewis, expressed sympathy to those who believe that the acquisition offer was too low, "especially considering that many unhappy shareholders are long-term investors may buy shares at the average price of Dell's higher" than $ 13.65. However, the company said in cash certainty better risk than continue to hold Dell shares, it said it would belong to the "obvious", if the buyout was rejected by nearly half - maybe.
Dell's stock fell 14 cents, or 1.1 percent, Wednesday to close at 12.88 yuan, down from $ 13.65 buyout offer. This is an indication that investors are not a higher bid. Some analysts worry that stocks will again sink $ 9 or less, if the deal falls apart Michael Dell.
Michael Dell (Michael Dell), the company's largest shareholder, threw in his stock, worth $ 1.6 billion of his fortune to help finance investment company led by a group of Silver Lake sold $ 750 million. Dell's stock and cash contributions of approximately $ 450 million transaction value.
Software maker Microsoft, Dell counts its biggest customers, support for trade loans $ 200 million buyers. Rest of the money to pay for the acquisition of the borrowed loan arrangements through banks, saddle Dell with more than $ 1.5 billion in debt, can improve their risk-averse corporate customers about their financial stability concerns.
Sales structure as leveraged buyouts, which requires debt acquired company financial transactions. Dell's sales is the second highest price of leveraged buyouts a technology company, trailing First Data Corporation in 2007, $ 2.7 billion to pay dollars.
Dell is now well-known story: a 19-year-old business started in 1983 by selling from his dorm room at the University of Texas at Austin computer disk drives. Soon he was assembling computers and undermine traditional retailers price. Then he raised $ 30 million in the company in 1988. Dell to change the PC business, low cost, custom orders and direct sales - first by phone and later on the Internet. CEO to climb the ranks of the richest Americans.
In 2004, when Dell stepped aside as CEO, sales of up to $ 4 billion a year more than one billion U.S. dollars 60 on the road. Dell in 2007, returned as CEO, the company has become the world's largest PC maker behind Hewlett-Packard Co. after it has undergone a $ 100 million business in fines and pay $ 400 million Dell's own accounting scandals led to . The company's stock fell more than 40% from where it stood Dell as CEO of his second stint returns.
Dell, 48, is seeking the company away from the glare of Wall Street and around the short-term demand, the next quarter's results, investors from the listed company's requirements. He will build on the company's recent efforts through mergers and acquisitions into more profitable sectors, including commercial software, network security and consulting.
Technical analyst Xindi Xiao, in San Francisco, said shareholders should take the $ 13.65 get out. She was still on the company's ability to reinvent itself skeptical.
"The proposed strategic plan did not work, since Michael came back as CEO, six years ago, is no substantive difference," Shaw said. In her opinion, the company in the pursuit of new technology to create openings lack speed and panache, but Dell wants to ensure that his reputation and "really believe that he can turn this around."
Moorehead says getting away from the more optimistic Wall Street's obsession with short-term results, will help.
"It may be necessary in 2056, switching from a PC to an end-to-end enterprise IT players," he said. "I have a lot of Michael Dell (Michael Dell) confidence in the ability, resulting in the company's transformation."
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