Dell Takeover Bid in Peril

Michael S. Dell’s effort to buy the company he founded has been thrown into jeopardy after a special committee of the computer maker’s board refused his demand to change the voting rules on the buyout offer, DealBook’s Michael J. de la Merced writes. With Dell shareholders set to decide on the deal on Friday, it appears that the offer of $13.65 a share, or a total of $24.4 billion, to take the company private is likely to lose the shareholder vote, people close to both sides say.

If the buyout fails, Dell will face even fiercer competition in the PC business, Mr. de la Merced writes. “They were cutting in anticipation of going private, making advances in a high-volume, low-margin business without having to show the results,” said Mikako Kitagawa, an analyst with Gartner. “They can’t be competitive with the pressure they’ll have from Wall Street.”

The company’s two chief rivals, Hewlett-Packard and Lenovo of China, are expected to redouble their efforts to take Dell’s customers if it seems like the company is reeling. And Dell’s board and prospective buyers have warned that the stock could fall into the $8 range if the deal collapses. On Wednesday, the stock fell 1.56 percent to $12.66.

BANKS FIND S.&P. MORE FAVORABLE IN BOND RATINGS  |  “Five years after inflated credit ratings helped touch off the financial crisis, the nation’s largest ratings agency, Standard & Poor’s, is winning business again by offering more favorable ratings,” Nathaniel Popper writes in DealBook.

“S.&P. has been giving higher grades than its big rivals to certain mortgage-backed securities just as Wall Street is eagerly trying to revive the market for these investments, according to an analysis conducted for The New York Times by Commercial Mortgage Alert, which collects data on the industry. S.&P.’s chase for business is notable because it is fighting a government lawsuit accusing it of similar action before the financial crisis.

“As the company battles those accusations, industry participants say it has once again been moving to capture business by offering Wall Street underwriters higher ratings than other agencies will offer. And it has apparently worked. Banks have shown a new willingness to hire S.&P. to rate their bonds, tripling its market share in the first half of 2013. Its biggest rivals have been much less likely to give higher ratings.”

A PROGRAMMER’S FIGHT WITH GOLDMAN SACHS  |  Sergey Aleynikov, a former star programmer at Goldman Sachs, was accused of stealing the firm’s computer code after he got a job at a high-frequency trading firm, and he was sentenced to eight years in prison. In the latest Vanity Fair, Michael Lewis explores whether the F.B.I., and Goldman, might have overreached in going after Mr. Aleynikov, who signed a confession after hours of questioning.

“He didn’t seem to know anything about high-frequency trading or source code,” Mr. Aleynikov said of the F.B.I. agent who questioned him. “I thought it was like, crazy, really.” His trial, which lasted 10 days, “was notable for its paucity of informed outsiders,” Mr. Lewis writes. Goldman’s role in the trial, Mr. Lewis continues, “was to make genuine understanding even more difficult. Its lawyers coached witnesses; its employees, on the witness stand, behaved more like salesmen for the prosecution than citizens of the state.” As Mr. Aleynikov put it, “they told things that were not in their expertise.”

Goldman has offered an extended response, published in Business Insider.

ON THE AGENDA  | 
Time Warner Cable and Procter & Gamble report earnings before the market opens. LinkedIn and the American International Group report earnings after the market closes Robert H. Benmosche, the chief executive of A.I.G., is on CNBC at 4:30 p.m. Terrence Duffy, the chairman of the CME Group, is on Bloomberg TV at 11:40 a.m. The ISM manufacturing index for July is out 10 a.m.

JURY DELIBERATING IN TOURRE CASE  |  It is now up to nine jurors, including a former stockbroker, a minister and a graphic designer, to decide whether Fabrice P. Tourre, a former Goldman Sachs trader, committed fraud as he set up a complex investment tied to mortgages, DealBook’s Michael J. de la Merced and Susanne Craig write. The Securities and Exchange Commission accused Mr. Tourre of misleading investors, and he faces seven counts of fraud. The jury did not reach a verdict on Wednesday and will continue deliberations on Thursday. Because it is a civil suit, the S.E.C. need only have convinced jurors with a preponderance of evidence, rather than beyond a reasonable doubt.

 |  Contact: @williamalden | E-mail

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