The special committee set up by Dell to explore a sale of the computer
giant on Friday said it was backing the buyout led by founder Michael
Dell although it would continue talks on alternate bids.
Dell on Friday filed with the United States Securities and Exchange
Commission a preliminary proxy statement relating to the proposed
acquisition of Dell by affiliates of Silver Lake Partners and Michael S.
The Special Committee, which was formed last August in order to evaluate
the full range of strategic and financial alternatives available to Dell,
has highlighted the significant risks and uncertainties that the company
faces as a stand-alone public company. The members of the committee
believe that a transaction that shifts to the buyer the risks associated
with Dell's business, at an acceptable valuation, would be beneficial for
The current Silver Lake and Michael Dell transaction delivers $13.65 per
share in cash - a 37% premium to Dell?s 90-day average price and a 25%
premium to the unaffected price prior to reports in the media about the
proposed deal. "We believe that this significant, immediate and certain
premium offers superior value to owning Dell as a stand-alone entity
today," the committe said.
The "go shop" process included a 45-day period during which the committee
sought alternative acquisition proposals as well as a period thereafter
in which interested parties could assemble and negotiate acquisition
proposals. The process generated two non-binding alternative acquisition
proposals, one from a group affiliated with Blackstone Management
Partners, L.L.C. and the other from entities affiliated with Carl C.
Icahn. The special comittes said that it would work with both of them "to
assist them in their respective due diligence reviews of the company and
to seek definitive proposals that would constitute a superior proposal to
the current Silver Lake and Michael Dell transaction."
Icahn has proposed paying $15 per share for 58 percent of Dell, while
Blackstone has indicated it can pay more than $14.25 per share.
Michael Dell has also confirmed his willingness to explore participating
in alternative acquisition proposals. However, there can be no assurance
that either non-binding alternative acquisition proposal will ultimately
lead to a superior proposal.
The committe also highlighted the risks for Dell if the company remained
a stand-alone public company.
"While we continue to recommend the current Silver Lake/Michael Dell
transaction, and to work toward completion of that transaction, we will
also work with Blackstone and Icahn to seek to develop a definitive
alternative proposal that provides an even more compelling value
proposition for Dell?s shareholders. Our goal was, and remains, to ensure
that whatever transaction is consummated is the best possible outcome for
Dell's shareholders," the committe said.