September 12, 2013, 10:17 am

Dell Shareholders Approve $24.9 Billion Buyout

By MICHAEL J. DE LA MERCED and QUENTIN HARDY

Jay Janner/Austin American-Statesman, via Associated Press
Police guarded a meeting of Dell shareholders in Round Rock, Tex., on Thursday.

ROUND ROCK, Tex. — Dell shareholders voted on Thursday to approve the computer maker’s $24.9 billion sale to its founder, ending a monthslong slog that included fierce opposition from some investors.

At a brief shareholder meeting at Dell‘s headquarters here, Alex J. Mandl, the head of a special Dell board committee, announced that a majority of shareholders had voted in favor of the sale to Michael S. Dell and the investment firm Silver Lake.
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A person briefed on the matter said that roughly 65 percent of the shares that were voted approved the buyout.
The result had been anticipated after a Delaware court turned back a last-minute effort by the billionaire Carl C. Icahn to overturn changes to Dell’s voting rules that eased the path to a victory for the buyers.
Under the terms of the deal, shareholders will receive $13.75 a share in cash and a special 13-cent dividend.
“I am pleased with this outcome and am energized to continue building Dell into the industry`s leading provider of scalable, end-to-end technology solutions,” Mr. Dell said in a statement. “As a private enterprise, with a strong private-equity partner, we`ll serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals.”
Mr. Dell and Silver Lake hope to transform what is primarily a maker of personal computers and corporate computer servers, a business that made Mr. Dell a billionaire at 31, but one that has come under increasing pressure with the growth of smartphones, tablets and cloud computing.
According to Gartner, worldwide PC demand fell 11 percent in the second quarter of this year. Last month Dell reported revenue of $14.5 billion for its second fiscal quarter, with a 72 percent drop in net income.
Mr. Dell has not given detailed plans for how he hopes to bring his company into the modern tech world, though he has already spent $13 billion on acquisitions, primarily software and networking companies, to build a cloud business aimed primarily at small and medium-sized businesses, long a core market for Dell.
How he will do this remains to be seen.
“He very much believes in turning Dell into the best provider, simple and affordable for mid-sized companies,” said John Swainson, president of Dell’s software division. “He’s a guy who started a business in his college dorm room and grew it to a $60 billion business. He feels a connection to entrepreneurs.”
Mr. Swaison, who joined Dell in 2012, has said it will take five years or more for software to make significant contributions to Dell’s revenue. In the meantime, there is little sign that the fall in PC demand is over. In July Institutional Shareholders Services, a proxy advisory firm, compared saving Dell to “trying to catch a falling knife.”
Mr. Dell will have to stay in the PC business in some form, if only for the cash it generates, and may in fact see opportunities in manufacturing new kinds of devices for business and consumers. At an Intel event Wednesday, many new PC and tablet models from Dell were on display. A Dell executive showed off a tablet computer from what he said was a new family of devices, called Venue, that Dell will introduce on Oct. 2.
http://dealbook.nytimes.com/2013/09/12/dell-shareholders-approve-24-9-billion-buyout/