Dell reaches deal with founder on buyout

Brett Molina and Scott Martin | USA TODAY

Show Caption Hide Caption Dell best offer 2.0 Michael Dell and Silver Lake upped their best and final offer for Dell once again. The founder is getting closer to taking back his company.

Michael Dell and Silver Lake Partners have sweetened the terms of a buyout bid for the founder's namesake PC company, forging a revised offer agreement with the special committee of Dell's board in the face of legal opposition by billionaire investor Carl Icahn.

CEO Dell and the investors have offered $13.75 a share and a special dividend of 13 cents per share upon closure of the deal. The arrangement also guarantees that the third-quarter dividend of 8 cents per share will be paid at or before the deal's close. All told, the offer boosts the deal's value by $470 million.

In exchange, the board's special committee would agree to allow a change to voting rules so that votes not cast would not be counted as no-votes, seen as a blockade to enough votes for passage.

Dell has moved up the record date for the deal to August 13, allowing shareholders who own stock as of that date to vote. A scheduled shareholder meeting to vote on the deal has been moved to September 12. Dell shares are up 5% in early trading.

Brian Quinn, associate law professor at Boston College, expects the deal to go through, even with continued challenges from longtime opponents Carl Icahn and Southeastern Asset Management.

"The special dividend and the quarterly dividend provides existing shareholders an opportunity to take some cash out ... before they hand over the company to Silver Lake," he says.

The deal is the latest in the ongoing battle over the future of the world's third-largest PC maker. Last week, Michael Dell and Silver Lake offered a "final" proposal at $13.75 a share, so long as Dell excluded abstentions -- which count as "no" votes -- from the shareholder voting tally. In a letter issued Wednesday, Dell's special committee had rejected the amendment, but offered to consider the higher bid.

Meanwhile, billionaire investor Carl Icahn and investment management firm Southeastern Asset Management continue their efforts to thwart a buyout plan they see as "undervalued." In a letter on Monday, Icahn and Southeastern urged shareholders to "let the desperate Dell debacle die."

Icahn also filed a lawsuit in a Delaware court attempting to block Dell from setting a new record date for the shareholders' vote, which takes place today.

The longer the buyout saga plays out, the longer it takes Dell to begin its plan for a turnaround, as it and other personal computer makers continue to struggle while more consumers ditch home computers in favor of smartphones and tablets.

Follow Brett Molina on Twitter: @bam923.