Personal computer maker Dell, Inc. (DELL) announced Thursday that its shareholders have approved the $24.9 billion deal for Dell to be taken private by its Founder, Chairman and CEO Michael Dell and private equity firm Silver Lake Partners, even as activist investor Carl Icahn pulled out his rival bid on Monday.
The deal is now expected to close before the end of the third quarter of Dell's fiscal 2014, a little later that Dell's previous expectations to close the deal in the second quarter of fiscal 2014.
The preliminary vote tally from the special meeting of stockholders shows that the deal was approved by the holders of a majority of Dell's outstanding shares.
The voting excluded shares held by Michael Dell, certain of his related family trusts, Dell's Board of Directors and certain members of its management, as separately required under the merger agreement. Michael Dell is the largest shareholder of Dell with a 15.6 percent stake.
"I am pleased with this outcome and am energized to continue building Dell into the industry's leading provider of scalable, end-to-end technology solutions,. As a private enterprise, with a strong private-equity partner, we'll serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals," Michael Dell said in a statement.
The deal will see Dell shareholders receive a total consideration of $13.88 per share in cash, including $13.75 in cash for each common stock of Dell they hold, plus payment of a special cash dividend of $0.13 per share.
Additionally, Dell shareholders are guaranteed the payment of the regular quarterly dividend of $0.08 per share for the third quarter.
Round Rock, Texas-based Dell had initially agreed in early February to be taken private for $13.65 per share by Michael Dell and Silver Lake in a $24.4 billion deal. The deal was expected to close before the end of the second quarter of Dell's fiscal 2014.
In late-July, Michael Dell and Silver Lake raised their offer for Dell by another ten cents to $13.75 per share in cash, but subject to a change in voting rules in order to aid the buyout process. That offer raised the original $24.4 billion bid for Dell by $150 million.
Finally, a revised deal was inked in early August that included an improved offer and additional special dividend in return for amending voting rules to aid the smooth approval of the deal. That increased the offer by about $470 million to about $24.9 billion.
Billionaire Icahn finally abandoned his six month long effort to thwart the deal after Michael Dell and Silver Lake repeatedly boosted the offer price and added a special dividend. Michael Dell also succeeded in amending the voting rules to smoothen the buyout.
The deal has all along found stiff resistance from stakeholders, particularly from three of its largest stakeholders such as Icahn, T. Rowe Price (TROW) and Southeastern Asset Management.
Dell, once a darling of Wall Street and the world's largest PC maker, was among the worst-hit tech giants during the recession. In recent times, Dell has been grappling with lower sales as consumers shift their preference to Apple Inc.'s (AAPL) iPad and smartphones.
Alex Mandl, chairman of the Dell's Special Committee, said, "By voting in favor of the transaction, the stockholders have chosen the best option to maximize the value of their shares. I want to thank my fellow Committee members and the entire Board for their diligent and tireless efforts on behalf of Dell stockholders, and the stockholders themselves for the careful consideration they gave to this important matter."
In Thursday's regular trading session, DELL is currently trading at $13.87, up $0.02 or 0.14% on a volume of 13.42 million shares.
by RTT Staff Writer
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