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Dell encouraged to raise bid

NYT/ AFR | July 5, 2013
Dell's directors have encouraged Michael Dell to raise the deal's offer price of $US13.65 a share if he wants to win the bid.

Icahn pressed his attack in recent days, outlining the $US5.2 billion in debt financing he has arranged with the investment bank Jefferies to support his proposal.

Other shareholders appear to have been little moved by Icahn's announcements.

The special board committee has heard from a number of investors that the current offer price was insufficient. And a tough meeting with Institutional Shareholder Services, the most influential proxy advisory firm, left directors with the impression that it would urge shareholders to vote down the transaction.

ISS is expected to release its recommendation next week, and could still recommend that shareholders adopt Michael Dell's offer. It has told Dell's committee that it is weighing the merits of the management buyout against inaction, and would not factor in an alternative plan like Icahn's.

Traditionally, ISS' recommendations have held enormous sway over institutional investors, although in recent years the firm's influence appears to have waned somewhat. Still, Dell's special committee believes that a recommendation for the buyout would ensure its passage.

The special committee's approach was reported earlier by CNBC. 


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