By Benjamin Pimentel
SAN FRANCISCO--Unless there's another postponement, Dell Inc.
(DELL) shareholders will finally get to vote on the fate of the
technology giant next week.
And some analysts see Founder and Chief Executive Michael Dell
getting the go-ahead to take the company he started in his Texas
college dorm room private.
The vote on the Dell proposal, which has been delayed twice, is
scheduled for Thursday, Sept. 12.
"We hear from the investors that the tide is turning," said Ray
Wang, CEO of Constellation Research. "Other than that, it'll be a
close vote."
Brian Marshall of ISI Group said, I think it's a done deal and
Dell will be a private company soon."
That was also the view of Gary Lutin, chairman of the
Shareholder Forum, which has been closely following the battle.
"Most professionals expect an approving vote next week," he said.
"Everyone's grown tired of the drama and just wants a practical
conclusion."
The drama has come mainly from fierce opposition to the deal by
billionaire investor Carl Icahn and Southeastern Asset
Management.
But with a higher offer based on a buyout price of $13.88 a
share, and a change in the voting rules that's expected to make it
easier for the deal to be approved, Michael Dell and Silver Lake
are seen gaining the upper hand a week before the vote.
Michael Dell's bid also recently got a lift when the deal was
endorsed by three major proxy advisory firms, Institutional
Shareholder Services, Glass Lewis and Egan Jones.
Icahn and Southeastern Asset Management could not immediately be
reached for comment.
Michael Dell has kept a low profile, skipping the company's last
few earnings calls.
"Mr. Dell has been meeting with customers, partners and Dell
team members around the world. As always, he's running the
business," spokesman David Frink said.
It's a business that's progressively getting worse, according to
some analysts who think investors should simply sell to Michael
Dell rather than risk a lower price in the event of an extended
battle between Dell and Icahn. Last month, Dell posted a 72% drop
in profit, as the company continued to reel from a collapsing PC
market.
But last month's Dell report also offered hints of what a
privatized company would look like. Analysts noted that Dell has
been cutting prices aggressively to gain market share, especially
in the enterprise market.
That strategy appears to be paying off based on the latest data
on the server market.
Dell remains at No. 3 behind IBM and Hewlett-Packard in the
second quarter, according to IDC. But IBM (IBM) and H-P (HPQ) each
saw their share of the market shrink, while Dell's share rose to
19% from 16%.
The trend underscores Dell's recent push to focus more on the
corporate tech market, and less on lower margin businesses, such as
PCs--a strategy that analysts say would be easier to pursue by a
privately-held Dell.
It's a strategy that Michael Dell has been highlighting on his
Twitter account where he has kept busy as the battle over his
privatization proposal raged. "Huge thanks to our customers in
North America for their trust and confidence making Dell No. 1
choice for servers," Michael Dell said in a Twitter post last
week.
He posted two more versions of the tweet thanking Dell's
business customers in Asia Pacific/Japan and Latin America.
Benjamin Pimentel; 415-439-6400; AskNewswires@dowjones.com
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