Icahn Increases Dell Bid: Bloomberg West (07/11)

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July 11 (Bloomberg) -- On today's "Bloomberg West" the focus is on innovation, technology, media and the future of business. Hosted by Emily Chang with Editor-at-Large Cory Johnson and Senior Correspondent Jon Erlichman from Bloomberg's San Francisco studio, it showcases the personalities, companies and trends that are transforming the global economy. (Source: Bloomberg)

Live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world.

I'm emily chang.

Our focus is on innovation, technology, and the future of business.

Let's get straight to the rundown.

You are is not giving, telling bloomberg you will be submitting a higher bid for dell by tomorrow morning.

Silver lake have already said they will not sweeten their takeover offer.

Steve ballmer announces a broad restructuring, shuffling executives and getting rid of units focusing on individual products.

Will that be enough to get microsoft to catch up in mobile?

We go live to sun valley, or we're catching up some some of the biggest things in tech and media.

First, to the lead.

A story you saw first on bloomberg.

Carl ichahn is not giving up his fight to take over dell.

He says he'll make a higher offer by tomorrow morning as the battle for the pc maker takes a dramatic turn.

In a interview, he once again insisted that the pc maker is worth more than the 13 -- $13 buyout put forth by silver lake.

This comes after days after the recommendation of the approval of the offer.

Trish regan spoke with him.

What is his end game here?

He wants to make sure that a -- that he and other shareholders get what the company is fairly valued at.

$13.65 a share just simply isn't enough in his opinion pretty intense to sweeten his offer.

He is going to to do that tomorrow morning, he did give us some details.

Let us listen to what he had to say.

We take our bid now.

We're going to add to that bed -- bid.

We are going to add a war into that.

That could go into the details.

We're still working them out out.

The bill will be superior to what is now superior.

That news is breaking test a short time ago here on bloomberg.

He says he will sweeten his deal.

Shareholders have a few different options for july 18 when it comes to this big bow.

They could vote no.

They could vote for the deal.

If they vote no, they would still get their $13.65 a share.

The third option is the interesting option.

This is what mr.

Icon is putting forward.

He wasn't to exercise their up regional bass up racial -- exercise their appraisal rights.

You would have a judge decide what is the proper evaluation for the company.

He could decide the company was worth $10 a share or $20 a share.

It would come down to one single judge.

What is interesting, per the delaware statute, shareholders would have a 60 day grace.

They could elect to use their appraisal rights.

And they can change their minds.

Carl ichahn is making the point that you can have your cake and make it -- it needed to because you have this 60 day option.

You never know what might happen.

Maybe, michael dell and silver lake could be nervous enough that they would sweeten the offer in order to make our like on and other shareholders go away.

Nonetheless, you have to think about what is going is going on in the business right now.

It is a challenging environment.

Carl ichahn believes that he pc industry can persevere despite these challenges.

Iss, i respect them.

They are not analyst.

I do not think they claim to be.

I'm surprised.

They are drinking the kool-aid that dell tells them.

I think the pc area has a secular change going on.

Dell will say we have today get manager that.

He thinks dell to take advantage of that.

Iss came recommended that shareholders vote with michael dell.

They were concerned about the industry overall.

Again, carl ichahn is emphatic that there is potential here.

People worry quarter to quarter to much greed that is why we have such a good record.

We do not have to look at quarter to quarter to make -- you do not make money from that.

That is when you buy things.

You buy things when things are changing.

Dell is made $14 billion in acquisitions.

They are really starting to click in.

Dell is in a great position to take advantage of the secular change going on, in our opinion.

Here is the special committee coming out talking about the costs and risks of this potentially.

What about those out there who are dismissing this move as a hail mary pass?

Lex -- it is interesting.

Dell is responding to what he is offering.

They say it is a suspiciously large number, and do not vote in favor of the acquisition, the merger agreement will be terminated.

-- this is going to require a little bit of investigation.

This cross moments ago.

The reason being, if you look at the merger agreement, sober like an dell do not seem to have an out.

They cannot make this decision . because so many people have exercise their appraisal rights, they can get out of the deal.

Typically, any merger, there will be a process -- a clause that says that.

50%, 20% of sure hurdles -- shareholders using their rights.

This merger agreement does not seem to have that.

It is interesting that they are making this statement.

I know the folks at dell and silver lake were anxiously waiting for this july 18 date so they could put this behind them.

How long could this not drag up?

Icad the one years.

Think about it.

If enough people exercise their appraisal rights, and they blow through that 60 day time, they decide they are taking this, and it is going to come down to a judge, you have an entire process that could take a year- two years.

I ask are all about that.

-- i asked carl about that pretty made the point that ultimately, he think it is worth it and that there are ways to earn some interest on the capital that is tied up.

It is a risky says he is willing willing to make.

He is in it to the bitter end.

All right.

Trish regan ner.

Thank you for that update.

I want to get to sun valley, idaho.

The allen and company conference . brian grazer is one of hollywood's highest hitters.

He is the cochairman of the magic entertainment, which produced "oppressed development" for netflix.

-- "arrested development" for netflix.

Our thanks to brian grazer.

I think on your way over here, you brain to jack dorsey.

You just mingle with the new technology players.

You have taken this newly into -- new leap into new media.

There is the success of netflix.

What can you tell us about the metrics in the performance of that show?

The return?

We're really really excited that it came back.

People were able to watch it all at once.

I want to stay out of the phrase of binge viewing, although it is.

It enables you to watch all 15 episodes at once.

It played great people -- great very people like them.

-- it played great.

The metrics are never revealed.

The artists like ourselves, we think we did great even if there is no evidence.

I will tell you, -- mark entries in -- marc andreessen told me he is a binge viewer of arrested development.

There is important storylines and how you ended up producing the shows.

It changes the production schedule.

If you're going to do it and we did it with netflix , you are able to -- you are able to actually lay out the architecture of the way you are going to shoot the show so that you get jason bateman and the different stars, and you can slot them out.

This way, you are able to theoretically get better actors, the greatest actors, to work on a tv series they would not ordinarily be able to do.

I have to ask him are you going to do another season?

We are.

We are in conversations with them to do another.

They are interested in doing that.

Mitch is ready to do it.

So are the actors.

We are excited.

I want to talk about your projects.

One of the stories, is hulu.

Michael eisner seems convinced that hulu is sold.

The current owners might not keep their content their long- term.

I like you wage this in with big data.

You are the content creator.

What do you think about hulu?

I don't know.

It doesn't have an effect on me personally.

What we want to do, what all of us want to do that tell narratives, we would tell stories where stories get played.

Hulu, i'm not sure how that works in relation to us right now.

"24" got picked up again.

It will be spinning off in a series itself.

We are totally thrilled about that.

You got great feedback early on with that show in terms of people who would wait to watch a bunch of episodes at once.

That gives life to binge viewing pre-we didn't really anticipate.

People did.

They waited for dvds.

They would want to watch them all at once.

They would sit for two or three days and watch all the episodes.

Now you're able to do that with netflix.

There are other tech companies that will come into the market and will enable us to tell stories and do it in the same form.

A lot is going on.

Is it not your birthday tomorrow?

Surprises here on bloomberg.

Happy birthday.

Thank you.

Thank you for joining us here in sun valley.

Back to you.

Happy birthday, indeed.

We will that -- we will be back with jon in a minute.

More coming up on bloomberg west.

This is "bloomberg west," where our focus is on innovation, technology, and the future of business.

-- ballmer says the move is meant to unite microsoft around a single strategy, telling employees that we will see the product line moved holistically.

It means that a number of executives are shifting roles.

Cory johnson is here with more in today's drill down.

He said you were trying to understand if you understand it.

The more time between me and the memo, it is easier to understand.

Microsoft has been known as a lot of infighting.

There are a lot of people working together.

It is a sprawling campus.

There are nearly 100,000 employees brady have tried to have hundreds of different heads.

With this company, with different products, the company has just gotten to become so big that they try to have different division heads.

They do not work well together.

While they are trying something new, fewer division heads with more spots ability.

If he read the memo, you would not know.

This tells a lot about steve ballmer.

Let me read from the memo.

-- what?

As he read the memo, there is a lack of clear direction.

You start to see what it might be like to work there.

Speaking of that, it makes it more and clear who might succeed him.

He has been in that post for a very long time.

There are some people who think his time is up.

Whether going to see in this new position is opportunity to rise through the ranks, and now he's going to turn over the reins to somebody.

Up next, mark entries in -- marc andreessen on the latest trends in silicon valley.

Welcome back.

I'm emily chang.

The allen and company conference in sun valley, where some of the biggest deals and ideas are hatched, this is where some of the most powerful media and take titans are gathering for a jon erlichman is there pretty caught up the silicon valley titans, the cofounder -- marc andreessen . a lot of people look to him to see what he thinks about trends.

He does understands the game better than most.

A cofounder of netscape, along with being a vc on the board of companies like facebook and hp, he has made headlines about talking about a lack of ipos coming because of the new realities of being a public company.

There are questions about tech ipos going forward.

I did start our conversation by asking him is he surprised by the reaction -- reaction by the comments he is been making about ipos.

People get emotional about it.

It is objective reality.

I keep pointing out the number of companies in the u.s. in 1997 was 1800. there are massive collapse.

It is a huge change.

He one of the stories we have been following is that microsoft decided to do a re-organization.

I was talking to one former ceo who said every couple of years you can rearrange the deck chairs, otherwise shareholders are going to get angry.

The issue of sir holder -- shareholder pressure, does that factor and you're thinking question the with a company of microsoft, you have two whole to the pressure.

For small companies, you can get into real trouble with shareholder pressure preview need to raise money, and you come under attack, you may never be able to raise money.

It is very dangerous to be public unless you are strong and established.

We like to say, companies due to -- and to be a fortress before they go public.

The executives of twitter get asked every day when are you going public.

Theoretically, given the fact that they have investors who are investing in twitter early on, is that a company that could avoid going public forever?

They could go -- they could avoid it for a long time.

They have built themselves into a powerful company.

It is a more power for company and people think.

They can take their time and go public whenever they think they are ready.

The business is working very well.

The actual business is working better than people think.

It is a phenomenon.

It it is doing incredible well.

I'm curious about u.s. someone who sits on a lot of board spread i'm sure that works out for the business.

Do you get frustrated, maybe i shouldn't sit on a number of boards?

I'm cursed by terry all-city.

I love building companies.

I love it at all sizes and scales pretty it is interesting to me, i will be in a board meeting with an entrepreneur with four employees.

Then the next week it is with hewlett-packard with 4000 employees.

I was curious to see your partner blog about the management changes at zynga.

The structure of mark pincus, the founder, and reporting back to pincus because he is the chairman.

Are you on the same page with been on that issue?

We have different opinions print i agree with the general principle.

Goldman sachs has been having co-ceos pretty --. it can be done.

It works well in cases where people have long-established relationships and trust each other brady can be daunting for a new new ceo coming in to not really be the sole person in charge.

We certainly wish them the best.

We hope it works.

It is a challenge to make that thing where.

Let's talk about your companies.

The portfolio companies can build their businesses and be in the areas they need to grow to be a real player, and eventually do it while they study -- a private.

It makes be thing about the pitch that kkr was making back in the 1980s. is that part of the pitch you are making right now?

They are one of the firms we studied were me studied our firm.

We think it is possible for these companies to stay private and five for a long time bring one of the things -- for a long time.

You have got investors who will actually step in and participate much later than traditional vcs when he joined us at the milken conference, we're talking about what what happens in traditional retail.

Give the barnes & noble story.

They do have attachments to the note.

It is -- the niook.

Can it survive?

It is an impressive product.

The problem they have is they have to compete with amazon and google.

The world's best technology companies.

They are good at what they do.

It is very hard for somebody outside of the tech industry to compete with those guys.

Speaking -- quick speaking of google, you're a champion of google glass.

What is the one thing you have done with google glass so far that you think is really cool?

I have no sense of direction.

I have no idea where we are right now.

Having actual directions with you all the time, knowing where you are in your field of vision, it is amazing.

Changes orientation of the world.

That was marc andreessen.

Back to you.

Thank you.

We will see you later in the show.

If the parent company of bloomberg television is an investor in and reason horwitz.

-- andreesen horowitz.

? this is "bloomberg west," where our focus is on innovation, technology, and the future of business.

I'm emily chang.

Investor carl ichahn says he will make a higher offer for dell by tomorrow morning.

He says the $13 buyout undervalues the company.

He is urging shareholders to seek an appraisal of their shares.

Dell is firing back.

A say pursuing a appraisal -- sprint is trying to win over new customers.

The plans will guarantee unlimited calls, texting, and data is for as long as they keep the service.

The announcement comes after sprint's takeover was completed.

Nokia is hoping a new camera can help fund sells.

It'll be exclusively at at&t with a two-year contract pre- pre-order star july 16 -- contract.

-- the measure is part of the jumpstart act that was passed last year.

For more, want to bring in cory johnson.

This matters for entrepreneurs and investment bank.

It matters for investors.

You can look at this in very different ways.

What the rules of word since -- the way the world's -- rules have worked, they have prevented -- that has changed.

The new rules as the probation of against the solicitation of advertising shall not apply to offers of sales provided they are credited with investors.

Companies will be able to sell stock to rich people without having to go through the fcc that has been required.

This sounds like this will be great for entrepreneurs.

The reason these words are put into place was because it was great for entrepreneurs.

It was really great for crooks.

They could sell junk to rich people or other people with having to go to the fcc and convince never -- and convince them they were buying great things.

These rules seem great when everything is working well.

They were preferred to his paperwork.

These rules are and work for the first place because they were worried about scams.

We haven't had a lot scams lately.

The old world's -- maybe the old rules were working.

We will see if this leads to old problems down the road.

Thank you.

Marissa mayer appears to be losing, popular among pop -- her employees.

84% of employees to prove that her leadership in the second quarter of this year.

That is down for 91% approval rating from last year.

Welcome back, scott.

Always good to have you on the show.

It seemed like a big drop.

It depends on how you look at it.

She started at a 91% approval rating during the first quarter she was on the job last year.

That is phenomenal.

It dropped seven percentage points.

It is not a huge drop.

84% approval is still incredibly great.

You have to consider the average ceo approval rating amongst ceos is 68%. she is still quite high above average.

Isn't she higher than the former yahoo ceos?


We are able to look at the data.

When we look at her predecessors, not only she above them, she is well above them.

It does seem to be boding well for yahoo going forward.

We are seeing larry page, mark zuckerberg, and it does not compare to theirs.

Ballmer is going through a few struggles.

If we are talking layer page -- larry page, there are hundreds of tech companies around the world.

These are the best.

These are some of the three highest rated ceos.

She is in pretty good company.

She is not very far below.

Let's talk about your sample site.

How may employees are you talking to?

Over 180 employees.

Do believe that is a big enough number?

Thousands of employees, we get that question a lot.

We see themes and trends in as few as 10 reviews.

Looking at 180 is a sample size.

We see that in job seekers.

They start forming opinions in four-seven reviews.

Had to get the reviews?

They could affect the kind of people who are answering.

The is a great point to talk about.

Glassdoor does not solicit.

Former employees are coming to our site and sharing reviews.

This is helping other people discover what it is like for their end.

Why could her approval rating be dropping?

It is dropping four percentage points.

There approval rating has gone up and down, fluctuated 4- 10% and a quarter predicament different decisions made inside.

There can be external factors as well.

Over the past 12 months, there are pros and cons.

Employees are talking about an increased sense of transparency.

It didn't exist before.

We did see things, we were not too happy about the ban on telecommuting.

They talk about the hiring process being longer.

What about acquisitions?

We have not necessarily seen that within the reviews.

Any reaction from yahoo?

This is making a lot of headlines today.

We are monitoring it closely.

So far, the reaction from yahoo via social media or otherwise.

We will be looking for you results for q3. everyone seems to be interested in streaming video deals in sun valley.

Are people actually cutting the cord?

We will find out next.

I'm emily chang.

I wanted it back to sun valley, idaho.

Eric schmidt has just commented on google glass and when it may go on the market.

John altman -- jon erlichman is in sun valley now.

What did he have to say?

He's being careful with his comments.

He says they are going to get their same.

There are a lot of issues they have to address when it comes to getting glass out to the masses.

Rbc issues are top of mind for a lot of people.

Just for context, basically, every year at this conference, eric schmidt will hold court on this day with reporters.

He feels all sorts of questions.

-- fields all sorts of questions.

The nsa questions are top of mind.

Also, hardware questions.

Google when out and spent money to buy motor role of.

-- motorola.

We will keep you posted on all of the google developments.

One of the themes here at this conference is where media is going.

Are people actually cutting the cord?

Dave goldberg have is to be here and did a survey for us to put some tangible numbers behind this thing.

Good to see you.

You guys today cia -- surveying.

We did a survey with you guys a couple of months ago.

People didn't know anything about google glass.

Ill be interesting to look forward to see what happens with that.

On the cord cutting thing, it is interesting.

It is happening.

But slowly.

Where people watching?

Cable still seems to be the most popular.


Not surprisingly, when you look at younger demographics, that is where this i am not sure, you might want to keep my cable?

All those questions.

Cable nevers, as a port -- as opposed to cord cutters.

We have seen this with mobile.

The the the people would not have a landline phone 15 years ago was kind of crazy.

Now, 50% of the population is mobile only.

We are stunning to see it.

It is really only -- early here in the data.

People are asked to testing the waters and that means they end up with both.

One of the things you guys asked was when it comes to the pay-tv subscribers who have streaming and are thinking about switching, 13% are extremely likely.

That is a threat to the pay-tv industry.

When you see that pay-tv growth has basically stalled, even five percent switching, it starts to be a very meaning for mambo -- meaningful number.

We need to watch over time to see if those people really take that action, organism and they are kind of considering.

I cannot think we know from the survey data how people are going to behave.

We start to see that number growing over time predesignated in some.

A lot people who still aren't streaming, it seems like the reaction you guys were getting in your surveys is that they just do not want to unbundle.

Maybe that ties into another theme here, sports.

I think, clearly sports has proven itself to be the thing that does hope people in.

Even though most people do not watch live sports.

The notion of having access to it is important to people.

That isn't readily accessible if you cut the cord.

I do think there are certainly things, and sports is the biggest one of those.

We like to talk about media and technology.

Price and the economy are factors.

What you have found is if streamers are going to cut the cord, 30% of is going to be cost.

They are big.

That is the big risk for pay- tv providers and the content companies.

What you've seen is the pay-tv providers pushing up the prices because the content providers have been pushing up the prices.

This is factoring to the end consumer pricing.

It is growing faster than inflation.

The economy is not justifying that increase.

The content providers, the content is king in this role, they are driving the pricing of these pay-tv packages.

At some point, does the consumer say forget it?

It is not worth it.

I can get enough for $10 a month.

It plays into the whole hulu debate.

Thank you found that streamers are watching less tv overall.

Google glass comes around, and then who knows what happens.

I hope people are not watching google glass while they are driving.

A couple dated world.

-- a complicated world.

We will send it back to you.

Coming up, we'll be back with more bloomberg west in just a moment.

? welcome back.

I'm emily chang.

This is "bloomberg west turcotte we're learning new details -- west." in the final ntsb briefing, the chair said the final -- the pilot did not mention the slowing speed until nine seconds before impact.

They were two calls for a reported landing.

She says the plane will be taken apart and removed from the runway starting later today.

As federal investigators are clearing the physical crash site, how with a look into what happened during the final moments?

Organizations like the ntsb are turning to high-tech tools like lasers and animations to re- create the crash.

When he sue video like that of the crash site, just how difficult their jobs really are.

You talked about how technology can potentially help.

There are different facets of technology.

Technology and the plane, outside of the plane that helps them re-create.

There's technology of all the crowd sourcing.

She compared this to something like a csi of plane crashes.

In the past, we might have to rely on just the fight -- flight data recording.

Today, that availability is exploding.

It is not just what is in the cockpit what is available to all of us, airport surveillance video, now everyone has got a video camera in their pocket.

We have so much information, many times we are getting information from the public, actually crash sequences being filmed by the public inadvertently in the background.

It is very helpful.

A huge workload increase for our lab.

We have had a two under percent increase in devices coming into the lab that they have to read up.

We're not than you but -- talking my just recorders anymore.

What is the actual process?

Is it stormed -- stored on an avid system?

Some information is coming from the aircraft.

Other things in the aircraft are really just for monitoring and for health of the engines, or nonvolatile memory.

It is they are pre-we can access it.

We take the information, we might summarize and put information in our docket.

, -- if available to take a look at it, they can.

One of the issues for us is proprietary information.

We had make sure we protect that for the manufacturers.

We want to understand what is happening.

We need to also protect how they do their technology as well.

In terms of the way you investigate things, there is the ways and the places the information comes from.

Out process -- our process is still the same pre-we document the evidence.

Women look at at things like technology, we see that flight data recorders that used to have a parameters in an investigation 20 years ago now we have 1400 parameters on the flight data recorder.

We can see a lot of things about what is going on inside of the cockpit we could never see before.

Are you finding a lot of , a lot of surprises?

That it physically) the ntsb starts broad.

Everything is on the table when we again an investigation.

It is not just deciding what we want to rule in, but what we want to rule out.

We're looking at criminal activity.

The weather.

What kind of weather do they have?

We are not really looking at a weather-related accident, but we look at the weather.

If we can rule things out, we will.

We do the documentation, look at the equipment, and the biggest to help us create a more comprehensive picture of what was going on.

It does help us narrow our focus . we are going to focus on those things and spend more time on those things think are central to the accident.

20 years ago, were there tools and investigate or will be using?

Certainly, we would be using take measures to look at distances.

Today, we are using things like stations, gps-based technology.

We can do a laser scan of the accident site.

It is not a paper map or a photograph we are using any more pre-we can at things in 3-d. -- anymore.

We can look at things in 3-d. we can look at debris fields.

We can overlay the damaged aircraft.

We can really determine what was banished, how was impacted, what services were impacted.

There is a lot we can do in an investigation now.

Sophisticated animations can be back driven by the flight data recording.

A lot of tools are available.

Do you feel that when you're working on a case like this?

The very best tools that we have are our investigators.

You cannot change that.

You have smart people.

They are experienced.

They know what they are doing pretty a better tools to help them do their jobs.

At the end of the day, the experience will help understand what needs to happen, and how one needs to happen.

That was the ntsb chair with cory johnson.

Up next, stick around for our bwest byte, one number that reveals a whole lot.

? it is time now for the "bwest byte" where we focus on one number that tells a whole lot.

Jon is in sun valley.

Corey and i are out around the bay.

94,000 is the number of microsoft employees.

That is like the population of burbank or albany.

They have for people who are heads of division there now.

It is such a massive company.

You wonder if these changes are really going to make a difference.

I know you have been talking to executives out there about this.

What is the general consensus about whether or not this is a good thing?

I just got a image of 100,000 people coming down the hills here.

It is absolutely an army.

Every couple of years, you're going to come under pressure to make changes when you are that big.

It is always tough to make the changes.

It is a new world out there for sure.

Quite -- tech moves fast.

Sun valley is now the game of thrones.

Thank you all for watching.

We will see you all tomorrow.

This text has been automatically generated. It may not be 100% accurate.


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