Dell Committee Rejects Michael Dell’s Revised Buyout Offer

The special committee to Dell Inc.’s board of directors has turned down Michael Dell’s request to change the voting rules on his proposed buyout for the company.

The committee stated Wednesday morning that it will not accept the company CEO’s request to disregard the shares of stockholders who don’t vote on the buyout. Under current rules, shares that aren’t voted are counted as “no” votes on the $24 billion-plus proposal.

Last week, Michael Dell offered to raise the buyout price by 10 cents a share, to $13.75, in return for changing the voting rules to disregard shares that are not voted. At the time, he said it was his “best and final offer.” Dell Inc. spokesman David Frink declined to comment on the committee’s action.

The committee’s Wednesday decision appears to create an added challenge in the effort by Michael Dell and his financial ally, Silver Lake Partners of California, to complete the buyout and take the company private.

Activist investor Carl Icahn, who wants to submit his own proposal for the company, had urged the special committee to turn down the change in voting rules, arguing that it was changing rules that recent investors had relied upon when they invested in the company.

The committee said it was prepared to go ahead with a special shareholders’ meeting scheduled for Friday morning to vote on Michael Dell’s original proposal of $13.65 a share.

Or, it said it could change the “record date” to enable investors who bought shares after June 3 to vote on the revised buyout offer of $13.75 a share made last week. It remains unclear which choice Michael Dell and Silver Lake will make.

According to recent reports, the shareholder vote as of last week was extremely close, not counting those shares that were not voted.