--Special board committee of Dell Inc. rejected a request from
Michael Dell and Silver Lake to change the voting rules on their
buyout offer.
--A changed record date would allow for more recent shareholders
to vote for the deal, which could increase the turnout.
--In a letter this week, Carl Icahn and Southeastern Asset
Management Inc., Dell investors who opposed the buyout, urged the
committee not to change the record date.
A special board committee of Dell Inc. (DELL) rejected a request
from Michael Dell and Silver Lake to change the voting rules on
their buyout offer in exchange for a ten-cent price boost to $13.75
a share.
Instead, the special committee of the company's board charged
with negotiating the buyout deal offered to change the so-called
"record date" governing which shareholders can vote in exchange for
the 10-cent per-share bump.
The record date is currently June 3, meaning shareholders as of
that date can vote.
"A new record date would enable the many shareholders who bought
their shares after June 3, 2013 to vote on the transaction while
giving all shareholders more time to reflect on where their best
interests lie in light of the improved offer," the special
committee said in its letter to Mr. Dell and Silver Lake's Egon
Durban.
A vote is currently scheduled for Friday on the original $13.65
offer, after being delayed twice amid lower-than-expected turnout.
About 23% of shareholders didn't vote, which was a blow to the
buyout group because abstaining votes count as no votes. The buyout
group had sought to toss that rule out and have only shares that
were voted count.
A changed record date would allow for more recent shareholders
to vote for the deal, which could increase the turnout; some in the
buyout group felt some shareholders who had sold shares hadn't then
bothered to vote ahead of the prior deadlines. The buyout group had
also said last week the record date should be changed if its
proposal was accepted.
The special committee also said Wednesday it was willing to hold
a vote Friday as scheduled on the original offer of $13.65 a share
under the original rules with the original record date.
Any change to the record date is sure to be controversial. In a
letter this week, Carl Icahn and Southeastern Asset Management
Inc., Dell investors who have opposed the buyout and have
criticized the special committee's actions, urged the special
committee not to change the record date.
"We do not believe you should agree to change the record date
for determining stockholders entitled to vote on the Michael
Dell/Silver Lake transaction in the hope of providing Michael Dell
and Silver Lake with a more transaction-friendly voting base," the
two wrote. "In fact, we strongly believe that you should stop
postponing the vote on that transaction and allow the vote to
proceed toward its proper conclusion on August 2."
The investors weren't immediately reached for comment Wednesday
morning.
One person close to the buyout group said the group doesn't
think changing the record date would impact the vote enough to
warrant the price bump. Still, it remained unclear how the group
would ultimately respond to the special committee's proposal. The
person said a response was expected soon.
Dell shares slid 2.3% to $12.57 in premarket trading.
Write to David Benoit at david.benoit@wsj.com
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