For Dell, buyout uncertainty adds to poor PC sales outlook

Sun Aug 11, 2013 7:06am EDT
 
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By Poornima Gupta

SAN FRANCISCO (Reuters) - Months of public bickering, secretive backroom negotiations and eleventh-hour deals for control of Dell Inc belie the fact that the combatants are vying for a company facing steadily declining sales prospects.

The tussle between Chief Executive Michael Dell and firebrand activist investor Carl Icahn is also starting to spook some customers.

It's the last thing a company, grappling with the ever-darkening global outlook for personal computers, needs. IDC estimates Dell's PC shipments slid 4.2 percent in the second quarter, compared to a year earlier.

Some customers have begun asking if Dell is even going to be around in the longer term, said Michael Gavaghen, vice president of sales and marketing at Florida-based Dell reseller SL Powers. Sales are taking longer to close as well, he said.

"We hold their hand and gently say to just table the purchasing decision another few weeks," said Gavaghen. He stressed, however, that customers are "not fleeing by any means."

The cacophony surrounding the $25 billion buyout bid proposed by Michael Dell and Silver Lake Partners has picked up over the past month. Icahn threatened to wage a campaign to replace the CEO and his board, and sued the company in Delaware to try to force an earlier shareholder vote.

Michael Dell raised his offer twice to try to win over major investors. A shareholder vote has been scheduled for September after being delayed three times.

Morale within the company is stable for now, say some employees, though they add that could change rapidly if Icahn has his way and were to reshuffle management.   Continued...

 
A Dell laptop computer is pictured in New York in this August 26, 2008 file photograph. REUTERS/Brendan McDermid/Files