| ROUND ROCK, TEXAS/SAN FRANCISCO
ROUND ROCK, TEXAS/SAN FRANCISCO Aug 2 Dell Inc
shareholders convene for a third time on Friday to vote
on CEO Michael Dell's $24.4 billion buyout, helping decide the
fate of the No. 3 PC maker after months of dueling with Carl
Icahn and other unhappy investors.
The meeting in Round Rock, Texas, comes after two previous
adjournments, when the company wasn't certain of gaining enough
votes for what would be the largest buyout since the financial
Unless it's postponed again, Friday's vote may prove crucial
in determining the future of the struggling company. Its founder
and private equity firm Silver Lake want to buy and take the
company private, arguing that a painful restructuring can best
be performed away from Wall Street's scrutiny.
But the battle over that deal, announced in February, has
raged for months, casting a pall of uncertainty over a company
already shrinking along with a rapidly declining PC market.
The CEO, his advisers and proxy solicitors have gone back
and forth with shareholders whose votes are needed to secure the
deal. They've had some success, managing to get prominent
investors such as BlackRock Inc. and Vanguard onboard.
But activist investor Icahn, who views Michael Dell's
$13.65-a-share offer as too low, has amassed an 8.7 percent
stake in the company and is leading an opposing charge with
Southeastern Asset Management, with an offer of his own.
He has campaigned hard to get Dell to set a date for an
annual shareholder meeting so he can put up his own slate of
directors for the company.
On Thursday, he fired his latest broadside, suing Dell Inc
and its board to try to block substantial changes to the CEO's
buyout offer that may affect the outcome of any shareholder vote
and force the company to set a date for an annual meeting.
Dell shares are expected to fall sharply if the deal falls
through. On Thursday, they closed just below $13.
ROUND AND ROUND
Sources say the outcome of any vote remains a toss-up unless
the deal's terms are changed. Michael Dell has proposed a higher
$13.75-a-share, but only if the company's special committee --
appointed to review the deal -- agrees to change voting rules to
exclude abstentions from the count.
Abstentions currently count as "no" votes, and with an
estimated quarter of eligible shares not having voted either way
so far, that's a substantial hurdle to overcome.
The special committee, however, rejected that requirement
after several major shareholders expressed outrage. Instead, the
committee offered to change the record date, or the date at
which a shareholder is considered eligible to vote.
Such a change is also considered beneficial to getting the
deal pushed through, because a later record date would bring a
lot of so-called arbitrage investors into the game, who are
deemed more likely to want a deal.
In the longer term, investors remain divided over Dell's
prospects. Some are ready to cash out of a company increasingly
vulnerable to a crumbling PC market. The company created by Dell
in his dorm room in 1984, and which rapidly grew into a global
market leader renowned for innovation, is a now shadow of its
Others, led by Icahn and Southeastern Asset Management, are
convinced the company still has time to transform itself into a
dominant provider of business computing services.
Icahn has accused the company of resorting to "scare
tactics" by disclosing bad news and dismal forecasts. Dell
reported a 79 percent drop in profit in its latest quarterly