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The Deal: Dell Deal Is Delayed as LBO Offer Nears $25B

NEW YORK ( The Deal) -- The sponsor-founder team of Michael Dell and Silver Lake is increasing its bid to acquire Dell (DELL), the declining personal computer maker, to $13.75 a share, with strings attached, in an attempt to win over a few more stockholders to its side in the hotly contested deal.

The price of the leveraged buyout was increased to more than $24.6 billion on Wednesday, July 24, and a shareholder vote to approve the deal was rescheduled for Aug. 2.

The requirement for the $13.75 per share offer is that only a "majority of the outstanding shares held by the unaffiliated stockholders" be counted toward the deal vote. This means the stock held by abstaining shareholders will not count against the deal, as is typically the case, and substantially increases the likelihood that the new pool of shares will be tilted in favor of the LBO offer.

The new pitch fell flat with some stockholders that have previously sided with Carl Icahn against the deal.

In a statement to CNBC, stockholder Pzena Investment Management called the voting stipulation "beyond outrageous" and said, "Any shareholder who voted for this should rethink their vote because you are setting a precedent that Directors can be complicit in management's efforts to steal companies from shareholders who don't want to sell."

About 77% of stockholders appeared for the first special meeting scheduled for the deal vote on July 18, according to reports -- far more than the LBO team had anticipated.

"This is our best and final proposal," wrote Michael Dell and Egon Durban, Silver Lake's managing director, who is overseeing the deal process. "We are not willing to discuss any further increase in the merger consideration nor are we willing to increase the merger consideration to $13.75 per share without the change to the Unaffiliated Stockholder Approval."

Of course, shareholders have heard Michael Dell and Silver Lake crank out that tune before: Leaks from the buyside have suggested before they would be willing to raise their offer to acquire the PC maker.
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