Dell shareholders approve founder's offer to take firm private

NEW YORK: Dell shareholders have approved about $25 billion offer made by its founder Michael Dell and Silver Lake Partners to take the US-based computer maker private, putting an end to the long standing uncertainty shrouding the PC manufacturer's future.

"Based on a preliminary vote tally from the special meeting of stockholders, Dell stockholders have approved the proposal in which Michael Dell, Dell's Founder, Chairman and CEO, will acquire Dell in partnership with global technology investment firm Silver Lake Partners," the Texas-headquartered firm said in a statement.

Dell stockholders will receive $13.75 in cash for each share they hold, besides a special cash dividend of $0.13 per share to stockholders of record as of a date prior to the effective time of merger, for total consideration of $13.88 per share in cash, it added.

Michael Dell's efforts to take the firm private had hit a stumbling block as he faced stiff resistance from billionaire activist investor Carl Ichan and money manager Southeastern Asset Management.

Earlier this week, Icahn ended his months-long efforts to block Michael Dell's $25 billion offer to take the firm, he founded in 1984, private.

"The agreement also guarantees regular quarterly dividend of $0.08 per share for the fiscal third quarter would be paid to holders of record as of a date prior to closing. The total transaction is valued at approximately $24.9 billion," the statement said.

The deal is expected to close before the end of third quarter of Dell's fiscal year 2014.

The firm's headquarters will stay in Round Rock, Texas. On shareholders' approval, Dell said: "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."

Gartner Research Director Adrian O'Connell said: "Although, the company is going private from technology and strategy point of view, we do not expect any major shift."

"There are challenges in various parts of the business, not just technology wise but market coverage and other things. This will take some time to change. Going private will give Dell more flexibility in terms of raising funds, acquisitions, etc," Gartner said.

Dell, which entered India in 1996, has customers in large enterprises, small and medium businesses and retail consumers.

It has offices in eight cities, including Bangalore, Hyderabad, Delhi and Chennai. It also has a manufacturing facility in Tamil Nadu, set up in 2006.

Dell India accounts for the company's largest employee base outside the US. It employs 110,000 people globally.

According to research firm IDC's April-June 2013 data, Dell holds 11 per cent PC market share in India the second largest after Hewlett-Packard, which controls 34.1 per cent.

Speaking in a conference call after the approval, Dell said the company will invest in PCs and tablets as well as in expanding sales channels and distribution networks.

He said Dell has a long way to go and many challenges to meet. Under a new private company, the firm will have the flexibility to accelerate its strategy and pursue organic and inorganic investment without the scrutiny, quarterly targets and limitations of operating as a public company.

In an open letter to Dell customers, Michael Dell said: "We are going back to our roots, to the entrepreneurial spirit that made Dell one of the fastest growing, most successful companies in history.

"We're unleashing the creativity and confidence that have always been the hallmarks of our culture. We plan to serve you, our customers, with a single-minded purpose and drive the innovations that will help power your dreams."

He said Dell plans to serve its customers with a single minded purpose and drive the innovations that will help power the dreams of the consumers.

"We stand on the cusp of the next technological revolution. The forces of cloud, big data, mobile and security are changing people's relationship with technology, just as the PC did almost 30 years ago.

"Now it's time to do what Dell does best--make these innovations simpler, more affordable and more accessible, putting more power into the hands of more people than ever before," he added.