Dell Special Committee Backs Michael Dell Buyout Bid

DavidGilbert99 writes "In a surprising move, the special committee set up to decide which buyout offer was best for Dell has chosen to back the bid from founder Michael Dell, which promises the shareholders a smaller payday and will see him remain the head of the company." Their SEC filing on the matter indicates they are not confident that Icahn's counter-offer would actually provide the promised $12/share dividend.

Comments

seems reasonable

[Trepidity]

In particular, the deal comes with a "majority of the unaffiliated" vote requirement, meaning that for it to go through, a majority of shareholders other than Michael Dell must vote in favor. If that happens, i.e. a majority of non-Michael-Dell shareholders think he should be allowed to purchase and continue running the company, then there is no reason it shouldn't happen.

Re:seems reasonable

[AuralityKev]

But... Like... That's not NEARLY as sensational sounding. In fact, it seems goddamn downright reasonable and logical. That's not how I like my news!

Re:seems reasonable

[Bacon Bits]

Don't worry. Some irresponsible journalist will find the minority shareholders that don't want Michael Dell to buy the company out and get a nice story plastered all over Forbes and the Wall Street Journal. They'll probably spin it as a failure of the corporate model and that new, stronger laws should be passed to give shareholders more leverage.

Re:seems reasonable

[fulldecent]

>> If that happens, i.e. a majority of non-Michael-Dell shareholders think he should be allowed to purchase and continue running the company, then there is no reason it shouldn't happen.

Of course, assuming Michael Dell does not have undue influence on any of the other shareholders or those people are added to the "is Michael dell class". (FYI, this is a bad assumption).

Re:First Task

[KillaGouge]

I have always spoken with somebody in the United States that speaks English as a first language when dealing with Dell.

Re:Of course that's what's best for Dell

[interkin3tic]

That ditch would have to pay several times what the corpse was worth for that to happen.

In other news, Hamburglar prefers McD's hamburgers

[JoeyRox]

Over Burger King's.

Re:First Task

[unixisc]

I agree. That's been my experience as well.

On TFA, it's good news - Dell will continue to do business as usual, but make better decisions since the Wall Street pressure to show good numbers every quarter will no longer be there. Dell can make good long term decisions even if it means bad short term setbacks, w/o being dinged for it by Wall Street. They can decide what sort of a company they want to be, which markets to play in and which to leave, and where they have a good future.

Cut the small stuff

[Deflagro]

I wonder if he will take drastic measures to cut home and small box support like IBM did. Dell is going to a services only model and big enterprise stuff where the pretty margin lives. It's hard to cut half of your income and survive Wall Street but I'm guessing that's the idea.

I have a feeling there will be pretty huge internal changes.

Re:Cut the small stuff

[scottbomb]

Small stuff? Dell is America's #1 PC maker. They're #3 worldwide, behind HP and Lenovo. Granted, PCs aren't selling like they did 10 years ago because the market has matured (except in developing countries) and computers are so powerful that there is less incentive to replace them every 3-5 years like there was years back. Nevertheless, they still sell a LOT of PCs and I highly doubt they'd just throw that business away.

Re:Cut the small stuff

[Deflagro]

They do sell a lot but they don't make a lot from it. The margins are almost negative after all the overhead that goes into supporting it. It's really all Dell's fault for making computers so cheap with their crazy business model.

Let's just say I have a long personal history with them and it wouldn't surprise me one bit. Consumer took a big hit a couple years ago because they were ignoring that segment to coddle services. They spent billions on Perot and infrastructure for cloud services. They are changing the company and want to do it in private so when they are done, they can walk down wall street again.

Too bad my stock is worthless :P

Re:Michael Dell should consult with Michael Dell

[unixisc]

As has been pointed out in the past, he said that in 1997 when Apple was floundering as a result of all the delays to Copland and struggling as a result of their inability to introduce an OS for the PowerMacs that were as modern as Windows 95 and the various Unices. It wasn't until 2001 - 4 years later - that Apple had OS X, which surfaced on PowerMacs. So in the context of all that, Dell had said, when asked, that he would be probably one of the worst people to lead Apple, and that if he got the job, that's what he'd do.

Another case of taking a statement out of context, and applying it ridiculously. Something similar that used to be done to the late Ken Olsen of DEC

Re:This would be an April 1 joke!

[Captain Splendid]

I just love the fact that 15 years ago, Dell was King Shit and predicting Apple's demise in short order.

Now look were we stand.

Re:This would be an April 1 joke!

[Anonymous Coward]

Yep I see it too. Dell is moving to the enterprise and fast on its way to becoming a mini IBM where Apple is peddling gadgets and desperate for a new idea.

Re:First Task

[rezalas]

I worked for Dell tech support in Oklahoma City Oklahoma about 8 years ago. They have since expanded from one facility to three facilities in the area in addition to all the other US phone support campuses throughout the USA. They also provide support centers in South America and various parts of Europe and Asia to better serve their customers.

Re:Michael Dell should consult with Michael Dell

[quarterbuck]

I think he plans to convert it to a services company, so at least he is taking his own medicine. He is giving money to shareholders by buying the shares back.
It sounds a bit like he had a neighbor's friend die and he suggested "Bury her already", and now it is his turn and he is digging a hole in the ground. Sucks to be him, but I don't see anything wrong with what he is doing.

Re:Michael Dell should consult with Michael Dell

[scottbomb]

So you'd shut down the #1 PC maker in the US (#3 worldwide) because.....?

Re:First Task

[RabidReindeer]

they have more US operators than overseas. They have both though, because they need their business support to be top notch.

Actually, they have both because the business customers complained so loudly that they were forced to re-shore business support.

whoa

[slashmydots]

The only thing stupider than buying a Dell is buying Dell itself. He must not own one at home or he wouldn't even consider it.

Re:whoa

[Xest]

Maybe that's what he wants to change? Take Dell back to the day where people actually wanted their systems because they actually stood for quality once?

Re:First Task

[Xest]

Lucky you. I haven't since about 2003.

Re:I agree totally!

[DavidGMan]

Actually any shares not voted will be AGAINST the deal as part of the board's approval for Dell to buy the company. It's the folks who blindly vote with the board's recommendation who are lame. Given nature of proposed buyouts, likely arbitrageurs rushing into stock who will vote in favor of deal unless it's a close call while ordinary investors and those not wanting to take risk of it declining should it be rejected who will be getting out. $13.65/shr though is a paltry price though for a company that did share buybacks in the 20s, 30s, probably even 40s and 50s a share.

Re:"huge internal changes"

[Deflagro]

Let's just say I have a long personal history with said company. :P