Dell board agrees terms of buyout offer
A special committee of the Dell board has reached an agreement with the company’s founder Michael Dell over a buyout of the company.
Under the agreed terms Mr Dell, in partnership with the investment firm Silver Lake, will buy back the company he founded in 1984 for $13.75 a share plus a special one-off dividend of 13 cents per share. This is in addition to a guaranteed third quarter dividend of 8 cents per share. The deal which values the company at $24.5 billion will be put to a special shareholder meeting on September 12.
In a statement Alex Mandl, Chairman of the Special Committee, says, "The Committee is pleased to have negotiated this transaction, which provides as much as $470 million of increased value, including the next quarterly dividend that will now be paid regardless of when the transaction closes".
As we reported earlier this year the company's profits have been tumbling and Michael Dell plans to restructure the company away from PCs towards mobile devices and services.
The buyout has been resisted by some including major shareholder Carl Icahn who argue that the deal undervalues the company. This agreement makes it more likely that Mr Dell and Silver Lake will win the day but it doesn't guarantee that the wrangling is over yet.