TIMELINE-Dell's buyout: a topsy-turvy affair

Thu Aug 1, 2013 7:16pm EDT

Aug 1 (Reuters) - The proposal by Michael Dell and Silver Lake to buy out and take private the world's No. 3 PC maker, Dell Inc, for $24.4 billion will be put to the test on Friday, when shareholders gather for a third time in Texas to cast their votes.

Partnering with private equity house Silver Lake and Microsoft Corp, Michael Dell is offering $13.65 a share to take private the company he founded in a college dorm room in 1984 in what would be the biggest leveraged buyout since the financial crisis.

The vote is expected to be close following disgruntlement among larger shareholders who say his offer undervalues the company. Major shareholder Southeastern Asset Management has teamed up with billionaire investor Carl Icahn to lead a charge against the deal with an offer of their own.

Sources say that, with the outcome increasingly uncertain, Dell's board might postpone the vote, but no firm decision as been made.

Here are several of the major events that have transpired in the months-long battle that followed almost half a year of behind-the-scenes negotiations

Feb. 5 - Michael Dell and Silver Lake's buyout offer is announced and a 45-day "go shop" period commences during which a special board committee solicits rival offers.

In all, Dell contacts 67 parties.

Feb 8 - Opposition from major shareholders grows on the perception the $13.65 a share Michael Dell and Silver Lake offer undervalues the company. By the end of the week, some of the largest shareholders - Southeastern Asset Management, Harris Associates LP and Yacktman Asset Management and Pzena Asset Management - express opposition to the deal.

March 5 - Icahn informs Dell's board he is a substantial shareholder, later revealing he owns $1 billion in stock.

March 7 - Icahn demands that Dell pay $9 a share in special dividends and combine its annual shareholders meeting with a special meeting convened to vote on the CEO's buyout offer. He threatens a proxy fight and "years of litigation" if Dell rebuffs him.

March 11 - Icahn gets a confidential look at Dell's books.

March 22 - Blackstone and Icahn Enterprises send separate proposals to the special committee. Blackstone, which teamed up with Francisco partners and Insight Venture partners, offers over $14.25 per share for the entire company.

Icahn offers about $15 per share for 58 percent, the first of several counter-offers designed to give shareholders an alternative to Michael Dell's bid.

Under both proposals, Dell would remain a public company.

March 25 - Icahn starts initial talks with Blackstone, opening the door to an alliance with the private equity firm.

Around this time, sources with knowledge of the various discussions taking place say both opposing parties are talking with potential CEO candidates to replace Michael Dell in the event their bids succeed.

March 29 - Dell warns it will be dangerous to take on a lot of debt and remain public, calling the Blackstone and Icahn offers fraught with risk.

April 5 - Blackstone Group makes plans to begin an in-depth analysis of the company. Dell's special committee says it will give Icahn the same expense reimbursement available to the other two bidders if he does not threaten or embark on a proxy fight.

April 9 - Southeastern Asset Management issues an open letter arguing the company's proxy statement fails to make a compelling case for accepting the Michael Dell-Silver Lake offer. It casts doubt on the integrity of the filing, saying: "The board's sudden rush to sell is triggered by one thing: Mr. Dell's desire to buy."

April 16 - Dell strikes a deal with Icahn to limit his investment in the company. They agree he will not make purchases that boost his stake to over 10 percent of Dell's shares, or sign deals with other shareholders who, together with Icahn entities, would collectively own more than 15 percent.

April 19 - Blackstone withdraws from Dell buyout process, citing a "rapidly eroding financial profile" and an unprecedented 14 percent market decline in PC volume. Dell shares fall to a two-month low of $13.40.

April 24 - Several of the Oakmark Funds sell Dell shares after Blackstone ends its pursuit of the computer maker.

April 29 - Venture capitalist James Breyer plans retirement from Dell board.

May 6 - Dell acquires cloud-management company Enstratius.

May 10 - Icahn and Southeastern Asset Management propose a deal that gives shareholders $12 in cash for every share they own, as well as allow them to keep their stock.

May 13 - Icahn and Southeastern unveil candidates for a new board. The proposed alternate board includes Bernard Lanigan Jr., chief executive of Southeast Asset Advisors; Rahul Merchant, New York City's chief information officer; Jonathan Christodoro, managing director of Icahn Capital; Daniel Ninivaggi, Icahn Enterprises President; and Harry Debes, operating partner with buyout firm Advent International Corp.

May 16 - Dell reports a 79 percent slide in fiscal first quarter profit as personal computer sales continue to shrink.

June 5 - Dell's special board committee says Icahn is almost $4 billion short of the cash needed to fund his proposal for a $12-per-share special dividend. Continues to recommend buyout offer from Michael Dell and Silver Lake.

June 18 - Icahn reveals he is now the company's largest external shareholder, with Southeastern selling nearly $1 billion of its stock to him at $13.52 a share. He now proposes that Dell commence a tender offer for about 1.1 billion Dell shares at $14 apiece.

Icahn also lays out his plan to finance his deal, including offering $2 billion from himself and affiliates if needed.

June 21 - Michael Dell, in a regulatory filing, says he opposes any leveraged recapitalization and calls for shareholders to support his proposal.

July 3 - Several large shareholders, who collectively own more than 5 percent of the company, urge the board to draw up a contingency plan in case the buyout fails.

July 8 - Major proxy firms, including ISS, recommend that shareholders accept Michael Dell's offer, boosting his position.

July 10 - Icahn urges shareholders to vote against the buyout and suggests they pursue in court their legal right to an appraisal of the fair value of the shares.

July 12 - Icahn and Southeastern Asset Management raise their bid for Dell by adding a warrant they say would value each share at between $15.50 and $18, up from $14.

July 16 - Dell considers delaying its July 18 shareholder meeting because the vote might be too close to call, a person familiar with the situation tells Reuters.

July 24 - A second shareholder meeting on the buyout is adjourned. Michael Dell raises his bid by 10 cents to $13.75 a share, but adds a controversial requirement that a majority of votes cast be enough to seal the deal. Currently, all votes need to be considered and votes that are not cast are counted as a "no."

July 31 - The special committee rejects Michael Dell's demand, but says it is willing to move forward the vote's record date, which determines eligibility.

Aug 1 - Icahn files a lawsuit against the company and its board in Delaware. In particular, he asks the court to prevent any substantial voting requirement changes, including changing the record date, and reject Michael Dell's requirement that absentee or non-votes be discounted.

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