Term Sheet

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Michael Dell raises bid for Dell

July 24, 2013: 8:27 AM ET

icahn-vs-dellMichael Dell and Silver Lake Partners increase their offer to $13.75 per share. But there's a catch.

FORTUNE -- Michael Dell and Silver Lake Partners have increased their buyout offer for Dell Inc. (DELL) from $13.65 per share to $13.75 per share, just hours before a shareholder vote that has now been pushed back until next Friday.

The increase is a tacit admission that Michael Dell and Silver Lake could not round up enough shareholder votes in favor of their original proposal, which was submitted back in February. Their first failure to do so came prior to a planned vote last Thursday, which was adjourned until today so that the pair could find and persuade Dell shareholders who had not submitted proxies.

More specifically, approximately 27% of the possible votes abstained from last week's process -- a figure that was far higher than the 12% to 15% that had been expected. The reason that mattered so much was that abstentions in this process effectively count as "no" votes. As a condition to their increased bid, Michael Dell and Silver Lake would require Dell to no longer count abstentions at all (i.e., only actual votes would count, with Michael Dell still not allowed to vote his shares).

The extra ten cents is being split by Michael Dell and Silver Lake on a pro rata basis. In a letter to Dell's special committee, they refer to this as their "best and final" offer.

No response yet from Carl Icahn, who has been urging fellow Dell shareholders to reject the original buyout offer and then to subsequently support a new slate of directors that would enact a $14 per share self-tender.

UPDATE: Icahn has now chimed in via Twitter:


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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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