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Breakingviews: Dell's fearful compromise

Friday, August 02, 2013 - 03:24

Aug. 2 - Antony Currie and Breakingviews columnists explain how the prospect of a financial hit all round if the buyout failed brought the board and bidders back to the table.

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We -- finally have a deal -- -- -- this long running saga finally has a degree of compromise on the table that everyone seems well if not quite happy with at least. They might find acceptable ropes -- you've been the lucky person covering this in the beginning. What's happening now I think I'm lucky because it's finally winding down. Tom that what happened was the special committee people's support exactly they were trying to negotiate slightly higher price from Michael counseled for like they're the ones buying the company Michael -- and -- extended. Their best and final offer was on the table and they were gonna compromise. Ever and freaked out a bit and then suddenly they came to an agreement on because everyone would've lost had the deal. Michael they'll -- increase the -- about 2% so what happened is Michael Dell is basically agreed to pay. A special dividend thirteen cents and and also companies agreed to the third quarter dividend it'll pay it out this accident until. Advancing -- third quarter dividend Vegas based on which is what now standing next month and it. They increase in the price slightly and they're adding special dividend in exchange the board is that they're gonna change to board their voting rules so that are pushing back the date so in other words more arms will be able to vote -- -- they're gonna sport the deal. And also they're making is that no votes are counted as -- I'd say changing this is well having simply not a change it was earlier this week last week and I'm gonna change that. There's still -- -- -- giving anything away and that's. Well they may do it we don't know for certain exactly you know this this incremental 2% is going to be painful at chunk of it is becoming from Michael though. Still like my -- but in just a little bit more but I mean clearly if you look at where they started that we -- we've we've just looked at this deal back in February we thought for. Critics -- really well for them. But even though the price is a lot the weather says it traded for it yet well. Since then you've had bad news on the PC market bad news of Dell's business and earnings so rough that they thought the beta came in and and then -- to Blackstone -- -- yeah lots of other bidders have been approached him and they have the special committee to be fair I think has done a pretty -- -- Of looking for alternatives with a strategic or financial. And so late it was probably the position of -- we sort of wrote the piece on this a while back that actually. They were idle mind too much walking away at a certain point so isolated wanna put much more and right it was more unit. Michael delicate it has more to -- I would say that in Providence and you'll be on this bit. That's the surprise I think to me all the way along has been their -- like John you know reading list so you just want to. It is a noisy guy he may have ideas in making you can do something better. But why other cell that is have been so ambivalent about this deal because it seems that seemed to us is I think they are still worse. It became a no brainer to say yes than they've been willing to represent -- and giving them the shares of. Look at it that checking its relative to -- costs because people -- caught you know they'd invest in the company has had twenty bucks a share even hire them and suddenly they say. Oh wait you -- -- that thirteen 65 that's an outrage. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Thanks guys I'm will be back with more breaking -- next week.

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Breakingviews: Dell's fearful compromise

Friday, August 02, 2013 - 03:24