Dell founder has reached a consensus with private equity firm Silver Lake

According to foreign media reports, sources said in Friday, Dell founder, chief executive Michael Dell has reached a consensus with private-equity firm Silver Lake, not to increase the privatization of Dell's offer. By this effect, Dell shares fell 2.1% on the Nasdaq Stock market in Friday, at $13.03, the lowest share price since Dell announced the privatisation of its founder and Silver Lake Consortium.

At the current meeting of July 18, Dell held a shareholder meeting, Michael Dell and Silver Lake, the privatisation of the takeover bid to vote more and more close. Michael Dell and Silver Lake have previously offered a 24.4 billion-dollar offer to buy Dell outright at a price of 13.65 dollars per share. Next week will also be the most critical week for a Dell privatisation deal, as at least one influential equity agency will issue recommendations to Dell shareholders.

The deal has been criticised by some of Dell's major shareholders since February this year when Dell announced the company's founder's move to privatize Silver Lake. Unless Michael Dell and Silver Lake announce the price increase at the last minute, Dell shareholders will have to vote on July 18 to accept a 13.65 dollar cash purchase price per share or not to accept the deal, tying personal finances to Dell's fortunes and share prices.

The acquirer is always under pressure to raise the price of the purchase, and the posturing advantage is one of the tactics of the purchaser. However, Dell's share price in Friday appears to indicate that Dell shareholders already believe that the acquirer will not raise the purchase price to ensure shareholder approval for the privatisation deal.

The source said Michael Dell had not decided at the beginning of this week whether to raise the issue of privatization of Dell. This Thursday, Michael Dell and Silver Lake representatives held talks. The two sides reached a consensus in the talks, will maintain the existing purchase price, no longer consider the issue of price increases. It is understood that the acquirer is not currently convinced that their privatisation offer will be actively recommended by the investment consultancy Institutional Shareholder Services, and that a slight increase in the purchase price is not enough to offset the institutional Impact of negative evaluation of shareholder services.

In any deal, the acquirer will not disclose the price of the bid at the last minute. According to the source, so far, the privatization of Dell's consortium did not inform the Dell Board of Trustees of the Special Committee. Meanwhile, the Special commission said in Friday that it still favors the privatisation of Michael Dell and Silver Lake, and believes that if shareholders accept the Icahn (Carl Icahn) plan, they may face the risk of falling share prices. The committee said that if Dell's full-year results were the same as in the first quarter, the company's share price would have fallen to $5.85 trillion, and the company's share price would have been worth only 8.67 of dollars even as the company's previous earnings forecasts were realistic. The valuation is in sync with the competitor HP's P/E ratio.

With share prices facing downside risks, it is hard for some shareholders to say no to Dell's current privatisation offer. Many large investment companies will make their own decisions on privatization, rather than adopting the advice of investment advisers, but investment funds will rely on the recommendations of consultancy firms. Of course, shareholders often ignore the views of investment advisers when voting. Institutional Shareholder services, for example, objected to J in 2011. Crew Group is sold to a consortium of executives and others. But J. Crew Group shareholders overwhelmingly voted to pass the deal.

The Friday decline in Dell's share price suggests that corporate investors are confident about the privatisation of Michael Dell and the alternative of Icahn. According to Icahn and his partner, South East Asset Management, he will spend $5.2 billion on loans and 10.4 billion of dollars in cash and other assets held by Dell to buy Dell 1.1 billion shares at $14 a share. Following the completion of this transaction, Dell shareholders are still able to hold part of the company's shares and will hopefully reap the benefits from Dell's revival. Icahn believes that Dell will achieve a revival in the next few years.

Icahn said in Friday that he believed the Dell privatisation consortium had deliberately concealed the company's real situation and its own intentions. "I am tired of their propaganda," he said. If they want to do this, please help yourself. ”

If Dell's privatisation deal is passed, it will be one of the world's largest privatisation deals since the financial crisis. But the privatisation has been criticised since the start of the exposure, as investors believe that Michael Dell has made Dell a company by borrowing money and company cash, rather than letting shareholders participate in his vision. Michael Dell said the 13.65-dollar cash-purchase price would allow shareholders to avoid the business risks facing the company.