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Dell postpones meeting on buyout as more votes needed

Nadia Damouni and Anna Driver (via AFR) | July 19, 2013
Failure to garner more votes has resulted Dell to postpone a shareholder vote on its chief executive's $US24.4 billion buyout offer to next Wednesday.

It is unusual for corporations to adjourn shareholder meetings on such short notice, but governance experts say it can be done if the company bylaws allow it.

Over the next week, the board will encourage the apparently large number of shareholders that had not cast votes to support the deal, said mergers expert Brian Quinn, an associate professor at Boston College Law School.

"To encourage these votes to come out, they will likely also try to re-engage Silver Lake to seek out a higher price," he added.

On Thursday, Icahn was quick to respond to what he called an "unfortunate" adjournment.

"This delay reflects the unhappiness of Dell stockholders with the Michael Dell-Silver Lake offer, which we believe substantially undervalues the company," he said in a statement issued with Southeastern. "This is not the time for delay but the time to move Dell forward."

Vanguard and BlackRock had previously opposed the deal, but ultimately switched sides, a source said, requesting anonymity because the matter is not public.

Other investors previously seen as swing votes, such as State Street Corp, Bank of New York Mellon Corp and Invesco also voted in favour of the deal on the eve of the shareholders' meeting, the source said.

T. Rowe Price Group, Highfields Capital Management, Pzena Investment Management and Yacktman Asset Management have previously voiced opposition to the deal.

Vanguard declined to comment. Representatives of the investment firms were not available for comment.

Board member Alex Mandl, chairman of the special committee overseeing the buyout, set the new meeting date for Wednesday.

Under so-called majority-of-the-minority voting provisions, a majority of shareholders - excluding Michael Dell's roughly 16 per cent stake - would have to vote for the buyout for it go through.

Shareholder Ed Benson from San Antonio, one of the many retail investors that account for an estimated 10 to 15 per cent of shares in the company, turned up in Round Rock on Thursday but had expected the meeting to be adjourned.

"It's very hard to acquire that many votes," said Benson, who supports the buyout proposal.

But travel agent Linda Bush, who commuted to the meeting from the area, disagrees.

"The majority of people I talked to didn't vote for it. We need to be paid more".


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