DELL computer, since 1997, has consistently ranked as one of the top three PC companies, in terms of market share. Unfortunately for the PC market, sales have steadily been declining in favor of more mobile platforms, such as smartphones and tablets.
So what is a company whose bread and butter has been in the PC sales market to do? If you’ve been paying any attention to the computing world over the previous few months, you must be aware of the effort by Michael Dell and private equity firm Silver Lake to take DELL off of the public market and return it to a privately-held company.
Carl Icahn, one of the largest single shareholders in the company has been less than enthused by this plan and even set about to take over DELL with a leveraged buyout proposition of his own. The vote, originally scheduled for Wednesday of this week, has been postponed to Friday, August 2, in light of a final amended proposal by Dell and Silver Lake to over ten cents over the highest buyout offer so far.
In a letter to shareholders, Dell claimed, “After one of the most thorough processes in history, the highest price that any of the parties was willing to pay was $13.65 per share. Although no other party has offered to pay more than $13.65 per share, Silver Lake and I have now increased our offer to $13.75 per share, an increase to public shareholders of approximately $150 million, which is our best and final offer.”
Dell, in the same shareholder letter, claims the necessity to take the company private stems from a need to transform the company and transform it quickly. As noted in an article for ComputerWeekly.com, with the dramatic crash in sales of personal computers, Dell is looking to revive his company by focusing on a transition to a software and services firm.
Even amidst the boardroom drama unfolding before our eyes in real-time, DELL has announced their intentions to move in this direction, highlighting recent key updates to their OpenStack powered cloud services as well as the open source Hadoop services.
Additionally, DELL claims they intend to develop and support the Dasein open source project. Dasein is a Java-based cloud abstraction layer suited to application development.
“Dasein is the backbone of DELL Multi-Cloud Manager and is invaluable to users ranging from commercial software vendors to individual developers,” said George Reese, executive director of Cloud Computing at DELL.
Dell finished his letter to investors by asking that they use their vote, one way or the other. As the rules of the agreement stipulate, the buyout can only occur with a majority of the unaffiliated shares in the company. Unfortunately, the agreement also means any shareholder abstaining from voting is counted as a vote against the buyout. With greater than 25 percent of the shareholder votes still outstanding, the certainty of Dell’s buyout is in question.
photo credit: Gonzalo Merat via photopin cc
(Originally published at SiliconANGLE.com)