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Shareholders voting on $24.4 billion Dell buyout

July 17, 2013 • Business


FILE – In this Wednesday, Nov. 14, 2007 file photo, Dell CEO Michael Dell smiles at Oracle Open World conference in San Francisco. Dell Inc. is making a late push to win shareholder support for founder Michael Dell’s plan to take the slumping computer maker private, an indication that the scheduled vote, Thursday, July 18, 2013, could be close. Supporters of the $24.4 billion buyout believe Dell Inc. stands a better chance of turning around if it can make long-term strategic decisions without worrying about meeting Wall Street’s quarter-to-quarter expectations. (AP Photo/Paul Sakuma, File)

DALLAS (AP) — Dell Inc. is making a late push to win shareholder support for founder Michael Dell’s plan to take the slumping computer maker private, an indication that Thursday’s scheduled vote could be close.

Supporters of the $24.4 billion buyout offer believe Dell Inc. stands a better chance of turning around if it can make long-term strategic decisions without worrying about meeting Wall Street’s quarter-to-quarter expectations. But some big investors have already signaled opposition to the bid. Activist investor Carl Icahn believes the offer undervalues the company.

The company’s decision to go private is a reflection of the tough times facing the personal computer industry as people delay replacing traditional computers and spend their money instead on the latest smartphones and tablets. PC sales have been falling, and tablets are expected to outsell laptops this year.

CEO Michael Dell is hoping to evolve the company into a more diversified seller of technology services, business software and high-end computers — much the way IBM Corp. had successfully transformed itself in the 1990s.

Shareholders have until Thursday’s meeting at the company’s headquarters in Round Rock, Texas, to cast votes.

On Tuesday, a special committee of the company’s board sent a letter to shareholders emphasizing its opposition to a rival plan by Icahn and his Southeastern Asset Management fund. Together, they own 13 percent of Dell.

The committee said Icahn could have trumped the $13.65-per-share offer from Michael Dell and his group of investors, but instead submitted a recapitalization plan that it called risky and short on details. Icahn’s plan calls for rewarding shareholders with some cash now, but leaving about a third of the shares outstanding for shareholders to benefit from a successful turnaround.

“I believe it’s a very, very close vote,” said Patrick Moorhead, a technology analyst in Austin. “Institutional investors usually let a company know Login to read more

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