Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Shareholder Vote on Dell Buyout May Be Delayed Again

chariots-of-dell-icahnTomorrow, the struggling computer company Dell is scheduled to hold a meeting of shareholders to approve or reject a $24.4 billion buyout proposal. Now there’s word that the vote may be delayed again.

The New York Post reported today that the special committee of Dell’s board overseeing the go-private process is considering a second delay over concerns that not enough shareholders have weighed in.

The move would be a repeat of the immediate adjournment of last week’s meeting, which must have set some kind of record for the shortest corporate meeting ever.

As the Post’s unnamed sources tell it, as many as 22 percent of Dell shareholders hadn’t cast votes. And in this deal, a non-vote is essentially the same as a no-vote. The board would also have to set a new record date for shareholders to be eligible to vote their proxy. The current record date is June 3. Moving the record date would allow more shareholders to vote. A lot of Dell shares are now in the hands of investors known as “arbs” banking on the certainty of a payout if the buyout is approved.

The vote on the buyout is expected to be close. CEO Michael Dell and the private equity firm Silver Lake have proposed buying out all shareholders at $13.65. Carl Icahn, the billionaire activist investor, argues that the price is too low, and has offered his own recapitalization plan. It includes an offer to buy out 72 percent of shares at $14, and to leave the remainder trading publicly. Shareholders who sell their stock to Icahn would also get warrants to buy more Dell shares over the next seven years, with a strike price of $20.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik