Dell postpones meeting on buyout as more votes needed

Thu Jul 18, 2013 5:56pm EDT
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By Nadia Damouni and Anna Driver

NEW YORK/ROUND ROCK, Texas (Reuters) - Dell Inc on Thursday postponed a shareholder vote on CEO Michael Dell's $24.4 billion buyout offer, after he won 11th-hour backing from several large investors but still fell short of enough votes to seal the deal.

The meeting was called and then adjourned minutes later, after shareholders gathered at Dell's headquarters in Texas. Postponement of the vote until Wednesday buys time for Dell, the company's co-founder and chief executive, to win over naysayers for a deal that could be the largest buyout since the financial crisis.

Complicating matters, billionaire investor Carl Icahn, who has amassed an 8.7 percent stake in Dell, is leading a charge with major shareholder Southeastern Asset Management against the buyout with an offer of his own. He and others say Michael Dell's deal undervalues the world's No. 3 personal computer maker.

Investors are divided over Dell's prospects. Some are ready to cash out of a company increasingly vulnerable to a crumbling PC market. Dell has become a shadow of the company founded out of Michael Dell's dorm room in 1984, which rapidly grew into a leader in the global market and a model of innovation.

Others remain convinced the company can transform itself into a dominant provider of business computing services, under Dell's leadership or otherwise.

In the week leading up to Thursday's meeting, Icahn's team and Dell's special board committee, which supports the CEO's offer, flooded shareholders with letters and documents to argue their positions.

Vanguard and BlackRock Inc are now on board with the proposal, sources familiar with the matter told Reuters on Thursday.

Still, they said Michael Dell and private equity partner Silver Lake fell about 100 million shares short of the 735 million that they need for the buyout to pass.   Continued...

Dell founder and CEO Michael Dell delivers his keynote address at Oracle Open World in San Francisco, California September 22, 2010. REUTERS/Robert Galbraith