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Michael ‘Après Moi, Le Deluge’ Dell Digs In

"I am ready to fight and I am committed to doing what I believe is right for the company.”

Dell CEO Michael Dell told the Wall Street Journal in an e-mail exchange over the weekend that he intends to stay with the company if his multibillion-dollar offer to buy the joint and take it private isn’t approved by the stockholders.

He also said that he won’t support Carl Icahn’s notion of a leverage recapitalization or Icahn’s schemes to put the company deeper in debt or sell off some its assets to pay shareholders an ostensibly higher price.

Michael reiterated that the specter of $13.75 a share that he and private equity house Silver Lake Partners dangled in front of stockholders last week was a “best and final” offer worth $24.6 billion.

It’s a dime better than the $13.65 a share Dell’s board accepted in February.

He justified the uptick on the grounds that he’s asking for a change in the way the shares are counted so any abstentions are discarded.

Currently abstentions count as “no,” a situation he claims Icahn, who was never a Dell stockholder before Michael put his buy-put offer on the table, has been “unfairly” able to use a minority of shares to block the deal that “the majority of the unaffiliated shares voting on the transaction wanted to accept.”

“That’s why we’ve now requested that the standard be changed to allow the will of the majority of the unaffiliated shares voting on the transaction to control the outcome.”

Icahn personally controls about 8% of the votes but other stockholders like Southeastern Asset Management and T Rowe Price are backing his play.

The paper suggests that Michael’s comments may be a signal to stockholders planning to vote against the buy-out that they’d better support Icahn’s proxy fight to gain control of the company too or be prepared to walk away holding stock that’s lost all of its deal-inflated luster.

The same message may be intended for the Dell board’s special committee which has until August 2 to decide to change the rules or not.

Bloomberg reported last week that the committee wants $14 a share to change the rules.

“Given where we are today,” Michael told the Journal, “I believe the challenges we would face as a public company, including a potential proxy fight, would be significant. But I am ready to fight and I am committed to doing what I believe is right for the company.”

The 10-cent price increase is coming from both Michael Dell and Silver Lake on a pro rata basis. It works out to about another $150 million.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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