| NEW YORK, July 31
NEW YORK, July 31 Some of Dell Inc's
largest investors who have abstained from voting on a $24.4
billion bid led by founder Michael Dell to take the No. 3
PC-maker private told the company's board this week that they
would back the deal at the buyout group's latest offer price,
three sources close to the matter said.
The change of heart comes even as the special committee of
Dell's board on Wednesday rejected new voting terms in a revised
bid by Michael Dell and private equity partner Silver Lake,
which raised their offer price last week by a dime to $13.75 per
share on the condition the voting rules were changed. Currently,
shareholders who abstain are counted as voting against the deal,
but the buyout group wanted those investors to be excluded from
The shareholder votes that have come in so far are split
about evenly, the sources said. That means those who have
abstained from voting - who by some estimates constitute about
27 percent of the block - can determine the outcome.
Dell's special committee rejected the buyout group's request
because it did not want to change the voting rules. But the
sources said the compromise from some shareholders meant the
deal would get approved if Michael Dell agreed to pay $13.75 per
share with an amended record date.
A vote, which has been postponed twice before, is now
scheduled for Friday and the sources said another adjournment is
unlikely. The special committee has said it would put the
original buyout offer of $13.65 per share up for shareholder
The number of investors who are willing to change their
minds or how much stock they owned in Dell could not be learned.
But their willingness to vote now shows that a three-way
deadlock that has dragged on for months and put the future of
the computer maker in jeopardy may yet be broken, even though on
Wednesday postures of the buyout group and the special committee
only hardened more.
A source familiar with the matter said that the Silver Lake
camp was deeply disappointed with the response from the special
committee and now expects the deal to collapse.
Representatives for the special committee and the buyout
group declined to comment.
Dell has been facing a decline in its core business of
personal computers amid the growing popularity of tablets.
Analysts have said that Dell's shares, which closed at $12.66
per share on Wednesday, could see a precipitous fall if the
buyout offer were to fail.
Billionaire investor Carl Icahn, one of Dell's largest
shareholders, has made a counter proposal, where he would have
Dell conduct a large share buyback in a deal that he says would
be worth $14 per share plus warrants to investors. He is backed
by money managers Southeastern Asset Management and T Rowe
Price. The three hold almost 17 percent of Dell, according to
Thomson Reuters data.
A source close to Icahn and Southeastern said that the next
step may be an annual meeting leading to the appointment of a
new board of directors.
A spokesman for Southeastern declined to comment.
But a source close to the special committee said there was
growing concern that Dell may find itself in dire straits if the
buyout group's offer is rejected.
The drawn-out battle has meant shareholders are getting
"I would prefer to see an up or down vote than to see this
be dragged out," said Gautam Dhingra, CEO of High Pointe Capital
Management LLC, an investor in Dell. "I would like them to
outright reject the 10 cents and the change of the voting
"I won't try to predict what will happen on Friday because
they are so unpredictable," Dhingra said.