| AUSTIN, Texas, Sept 12
AUSTIN, Texas, Sept 12 Michael Dell is expected
on Thursday to clinch shareholder approval for his $25 billion
offer to buy and take Dell Inc private, ending months
of conflict with the company's largest investors and removing
uncertainty that has clouded the world's No. 3 PC maker.
Dell, who founded the company from a college dorm-room in
1984, fought for months to convince skeptical investors his
offer was the best option. This week, he gained the upper hand
after one of his staunchest opponents, activist investor Carl
Icahn, bowed out of the conflict because he said it was
"impossible to win."
Shareholders begin casting their votes on Thursday morning
in Austin, Texas, and if the billionaire and his partner, Silver
Lake, secure shareholders' okay at the special meeting as is
widely expected, the pace of transformation should quicken.
It may also assuage customers who have grown wary of the
company's direction during a very public battle that pits major
Wall Street players Icahn, Southeastern Asset Management and T.
Rowe Price against the CEO.
"Once the deal is consummated, they can move on and close
some of the large infrastructure deals they've been working on.
I do think there's been a bit of a pause," said Cross Research
analyst Shannon Cross.
Dell reported a 72 percent slide in quarterly earnings last
month, reflecting price cuts intended to soothe nervous
customers and spearhead a foray into the enterprise market.
Michael Dell has argued that revamping his company into a
provider of enterprise computing services in the mold of IBM
is a complex undertaking best performed outside of the
spotlight of public markets.
It remains to be seen if Dell can build its storage,
networking and software portfolios to vie with Hewlett Packard
Co and others. But with the PC market expected to shrink
again in 2013, investors say the company has little choice.
Some analysts think it may be too late, since a large swathe
of the corporate market has been locked up by IBM and HP.
Dell Inc in recent years has become one of the more
prominent victims of PC market erosion from mobile devices, such
as Apple Inc's iPad.
Its fortunes remain closely tied to sales of the venerable
personal computer, despite $13 billion in acquisitions since
2008 to expand into everything from software to networking. PC
sales, which have been shrinking for the last three years, still
yield half of its revenue.
Global PC sales are expected to fall 7 percent this year and
4.5 percent next year, according to analysts at CLSA. Dell's own
revenue is projected to shrink every year through 2016,
according to Boston Consulting Group, the firm hired by Dell's
board to review the buyout offer.
A vote on the buyout had been postponed three times as
Michael Dell and the company's board scrambled to garner enough
votes in favor. But on Aug. 2, Michael Dell raised his offer
price, tacked on a special-dividend sweetener, and got the board
to change voting rules so that abstentions no longer count
against him - turning the tide in the CEO's favor.
A change in the record date by more than two months was also
seen as enfranchising so-called arbitrage investors - hedge
funds that bought Dell stock more recently to earn a few cents
per share, and would thus be more likely support the buyout.
The current agreement before shareholders includes a 13 cent
special dividend on top of a 10-cent increase in the sale price
to $13.75 a share.
Dell's stock ended Wednesday flat at $13.85.