Some Dell swing shareholders ready to compromise: sources
By Nadia Damouni, Nicola Leske and Greg Roumeliotis
NEW YORK (Reuters) - Some of Dell Inc's DELL.O largest investors who have abstained from voting on a $24.4 billion bid led by founder Michael Dell to take the No. 3 PC-maker private told the company's board this week that they would back the deal at the buyout group's latest offer price, three sources close to the matter said.
The change of heart comes even as the special committee of Dell's board on Wednesday rejected new voting terms in a revised bid by Michael Dell and private equity partner Silver Lake, which raised their offer price last week by a dime to $13.75 per share on the condition the voting rules were changed. Currently, shareholders who abstain are counted as voting against the deal, but the buyout group wanted those investors to be excluded from the tally.
The shareholder votes that have come in so far are split about evenly, the sources said. That means those who have abstained from voting - who by some estimates constitute about 27 percent of the block - can determine the outcome.
Dell's special committee rejected the buyout group's request because it did not want to change the voting rules. But the sources said the compromise from some shareholders meant the deal would get approved if Michael Dell agreed to pay $13.75 per share with an amended record date.
A vote, which has been postponed twice before, is now scheduled for Friday and the sources said another adjournment is unlikely. The special committee has said it would put the original buyout offer of $13.65 per share up for shareholder vote.
The number of investors who are willing to change their minds or how much stock they owned in Dell could not be learned. But their willingness to vote now shows that a three-way deadlock that has dragged on for months and put the future of the computer maker in jeopardy may yet be broken, even though on Wednesday postures of the buyout group and the special committee only hardened more.
A source familiar with the matter said that the Silver Lake camp was deeply disappointed with the response from the special committee and now expects the deal to collapse.
Representatives for the special committee and the buyout group declined to comment. Continued...