Dell’s board of directors beseeched its shareholders this week to take the buyout offer brought months ago by CEO Michael Dell. The founder wants to take the company private once more so that they can restructure their product portfolio, adding more weight to cloud services and infrastructure; it’s thought that the computer giant would suffer potentially steep losses during this transition phase and the requisite public approval and regulatory filings would impede such a path.
Going private would allow Dell to re-emerge with a new strategy, leaner and meaner than before.
The primary challenge to Michael Dell’s (and backers Silver Lake Partners) attempt is led by investor Carl Icahn. Icahn has been very vocal throughout the process, wanting shareholders to reject the proposal and maintain some ownership of their shares. Icahn has seen support from Southeastern Asset Management as well as the Mid-South iron Workers’ Pension Fund. The fund sued Dell (the company) this week, claiming that the offered price of $13.65 a share didn’t accurately reflect the company’s value – even though current stock prices fall around a quarter less.