Michael Dell and Silver Lake Will Comprise New Dell Board
Dell Inc. (DELL) will install a new slimmed-down board composed of three members once it becomes a private company later this month, people with knowledge of the the matter said.
Chief Executive Officer Michael Dell, along with Egon Durban and Simon Patterson from Silver Lake Management LLC will replace the 10 directors of the computer maker, said the people, who asked not to be identified because the plans aren’t public.
The outgoing board was approved by shareholders in the company’s final meeting as a public company today at Dell’s Round Rock, Texas, headquarters. The vote, which also authorized executives’ pay packages, was largely symbolic, since the $24.9 billion leveraged buyout deal is scheduled to close during the last week of October.
“The directors’ terms are up and you’ve got to have someone running it until the deal closes,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “You want to make sure the board has authority through the close.”
Gordon Goldstein, a spokesman for Silver Lake, and a representative for Dell declined to comment.
Under the new capital structure, Michael Dell will own about 75 percent of the company and Silver Lake about 25 percent, people with knowledge of deal said.
When the buyout group sweetened its offer in August to acquire Dell, it arranged to hold a separate meeting to elect directors in an effort to thwart Carl Icahn’s opposition to the deal. The financier had sought to have a vote on the buyout and the annual meeting on the same day, to force a proxy fight.
The annual meeting, at which shareholders also approved PricewaterhouseCoopers LLC as Dell’s auditor this year, marks one of the final steps in a protracted takeover fight that spanned most of the year.
After Dell and Silver Lake announced their intention to buy the company in February, private-equity firm Blackstone Group LP (BX) explored an acquisition of the computer maker before withdrawing in April. Icahn and his partner, Southeastern Asset Management Inc., made a series of alternate proposals to investors, seeking to upend the original deal before bowing out earlier this month.
The buyers clinched the deal on Aug. 2 to buy back the company Dell founded in 1984, when they added a dividend payment of 13 cents on top of an already-increased offer of $13.75 a share in exchange for more lenient voting rules, replacing the original bid for $13.65.
Shareholders ratified the deal Sept. 12, clearing the way for the buyers to move forward with their plan to turn Dell into a bigger supplier of hardware and software for corporate data centers, as well as mobile technology, from a company largely dependent on personal computers.
To contact the editor responsible for this story: Pui-Wing Tam at firstname.lastname@example.org