Thu July 18, 2013
Dell Decision Day: Today's Vote on Buyout Delayed (Update)
Update: Dell is delaying a vote on founder Michael Dell’s offer to buy the company and make it private. The vote was scheduled to happen this morning – but is being pushed back – likely because major shareholders don’t support the deal.
Reports say the vote has been rescheduled for later this month.
Original Story (6:14 a.m.): It is decision day for Dell shareholders.
They are scheduled to meet this morning and vote on whether to accept a buyout offer from company founder Michael Dell and the private equity firm Silver Lake Management that values the computer maker at $24.4 billion.
Dell has come a long way since its founder, Michael Dell, started selling computers out of his University of Texas dorm room in 1984. The Round Rock-headquartered company is now one of the largest employers in Central Texas, sustaining about 14,000 local jobs.
The company’s innovation in selling custom PCs to people over the internet helped it thrive in the 1990s and early 2000s. But Dell has done less well in staying relevant to consumers as they switched to smart phones and tablets and cloud computing.
Now, Michael Dell wants to take the company private so he can refocus the business without the relentless demands for quarterly profit growth that is expected of publicly traded companies. His big plan is, in part, a turn to the past, still selling customized computer systems, but this time to businesses for cloud computing, networking and data storage.
But the road has not been easy. The deal has faced criticism that it undervalues the company and shortchanges shareholders, plus a very public campaign by billionaire corporate raider Carl Icahn to derail the buyout offer so he can get a piece of the action.
“I’ve been through a lot of these fights you know, I’m a cynic about corporate democracy and boards," Icahn said on CNBC yesterday. "And most of these boards are completely dysfunctional, but I’ve never seen one as bad as this. I really mean it. I’ve never seen anything where they actually go out and scare their own shareholders.”
Meanwhile, reports from Bloomberg News and Reuters cite anonymous sources who say the Dell board is considering delaying the vote because it might not have the support of more major shareholders to approve it.
So at this point, we can tell you this: The Dell shareholder’s meeting is scheduled to start this morning at 8 o’clock in Round Rock. And it may or may not be the start of a new chapter for one of the largest businesses ever to operate in Central Texas.