The man for whom Dell, Inc. is named is trying to buy back the company that bears his name. In response, the shareholder with the second highest amount of shares in Dell, Inc. with 8.9 percent of the stock has filed business litigation to stop the buy back. The shareholders say that the deal isn’t fair to shareholders and the board ought to be replaced.
Most everyone in Georgia has heard of the computer maker, which is the third largest computer maker worldwide. What may not have been as well known is the fact that the CEO of the company, Michael Dell, has put in a bid to buy back the company for $25 billion. The shareholder who has asked for court intervention says that would make the value of the company less than it should be. The shareholder alleges that the CEO has convinced the board of directors to change the way voting occurs so that the CEO’s bid is accepted.
The change is that those votes that are abstaining are not counted as opposing votes. A special shareholder’s meeting to consider the bid has been postponed numerous times, allegedly so that the CEO can change the minds of people who are opposed to his buy back. The shareholder has accused the board of directors of purposely postponing the meeting.
A hearing has been scheduled to consider the shareholder’s claims. It may be of interest to those in Georgia to see how this business litigation will turn out. Companies have an obligation to their shareholders, but they also have the responsibility to do what they believe is best for the company as a whole.
Source: Reuters, “Court delays conference on Icahn lawsuit to block Dell deal,” Dave Warner, Aug.12, 2013