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When Michael Dell offered to up his proposed buyout of the PC-maker that bears his name by a dime per share last week it came with certain conditions. Most importantly, the chairman and chief executive wanted any shares not voted to be ignored, rather than counted as no votes.
The billionaire and his private equity backers told the special committee of the company's board his revised bid was a take it or leave it offer, and Wednesday morning
"The Committee is not prepared to accept your proposal," a letter released Wednesday reads, before offering to change the record date for Dell's revised offer, which would allow shareholders who bought the stock after June 3 the right to vote on the transaction, "while giving all shareholders more time to reflect on where their best interests lie in light of the improved offer."
On July 23, Dell and his private equity partners at Silver Lake, offered to up their bid to $13.75 from $13.65, but only if the board moved the record date and changed the requirement that unvoted shares be considered as no votes. If Dell does not agree to Wednesday's counteroffer, the special committee says it intends to go ahead and reconvene its special shareholder meeting August 2 to vote on the original offer.
Dell's bid has come under attack from shareholders for trying to grab the company at a bargain price and reap the rewards of a turnaround while it is held in private hands. Carl Icahn and Southeastern Asset Management have been the chief agitators, proposing an alternative transaction that would also leverage the business, but do so in order to execute a massive share buyback and leave the rest of the company to shareholders who want to participate in a publibly-traded future.
Icahn and Southeastern ripped Michael Dell earlier this week for proposing the vote change, calling it a "cynical attempt to circumvent the process." While Icahn will surely agree with the board's decision to reject that portion of Dell's proposal, there is little love lost on that front either. The billionaire recently slammed the directors for trying to scare investors into accepting the buyout and compared the board to a dictatorship.
Shares of Dell were down 2.3% at $12.57 Wednesday morning, and have not traded above Dell's original $13.65 offer price since mid-June.