Michael Dell Says He’s ‘Passionately Committed’ to LBOAaron Ricadela
Michael Dell told Dell Inc. staff he’s “passionately committed” to seeing through his $24.9 billion leveraged buyout and using research and development and acquisitions to become more competitive.
In an e-mail to Dell’s 110,000 employees, which was provided to Bloomberg News, the chief executive officer said the company needs to change quickly and will maintain a “single-minded purpose” of creating value for its customers.
The comments come as Dell and his partner, private-equity firm Silver Lake Management LLC, are nearing the end of a more than half-year process of taking the personal-computer maker private against opposition from financier Carl Icahn and other shareholders. Last week, Dell and Silver Lake gained the upper hand by increasing their offer and winning a concession on voting rules that favors the buyout. Shareholders will vote on the deal Sept. 12 after three adjourned meetings in July and August.
“Dell needs to transform, and we need to do it quickly,” said Dell, who founded the third-largest PC maker almost three decades ago. “The technology landscape has fundamentally changed since the company was founded, and success requires this transformation.”
The CEO said management is “making the right decisions to position Dell, our customers and team members for long-term success.”
“We’ll retain the flexibility to invest in groundbreaking innovation both through organic R&D and acquisitions,” and the company plans to hire more sales staff, invest in emerging markets and expand its PC and tablet business, Dell said.
Dell and Silver Lake on Aug. 2 upped their offer by 10 cents to $13.75 a share, as well as adding 21 cents in dividends. The increased offer -- and actions by Dell’s board to move the shareholder record date for voting eligibility and not count abstentions as votes against the deal -- swayed some investors toward Dell’s proposal, versus an alternative one from Icahn.
“The offer delivers full and fair value for stockholders and is best for the future of our company,” Dell said. “Importantly, the revised transaction also enables us to enact the will of the majority of voting stockholders.”
Icahn sued Dell and his company Aug. 1 in Delaware Chancery Court, contending the founder’s offering price of $13.65 a share, now as much as $13.96 with dividends, was too low.
The Round Rock, Texas, company is seeking to augment its PC business with increased sales of data-center gear, software and computer services to stem declining sales and profit.
The shares of Dell rose less than 1 percent to close at $13.75.