July 8 - Advisory firm ISS backs Michael Dell's proposal for the PC maker over Carl Icahn's competing bid. Fred Katayama reports.
A big surprise in the five-months long dual over Dell: The influential shareholder advisory firm Institutional Shareholder Services has endorsed Michael Dell's plan to buy out the computer company he had founded. It had earlier been assumed that ISS would issue a negative guidance against Dell and his backer, Silver Lake Partners, and their $13.65 offer. That's less than the $14 price that rival Carl Icahn and Southeast Asset Management have offered to buy back the majority of shares, and Icahn's proposal would also leave part of the company public. But Dell's offer is in cash. ISS wrote that the transaction "offers a 25.5% premium to the unaffected share price, provides certainty of value, and transfers the risk of the deteriorating PC business and the company's on-going business transformation to the buyout group." That vote of confidence drove Dell's stock sharply higher this morning. The stock has risen nearly 29 percent this year fueled by the buyout bids, but it's less than one-fourth of its all-time peak ISS' backing gives Michael Dell less reason to up the ante. And it adds to the drama that will reach its climax on July 18, when shareholders cast their vote on the rival plans over Dell's future.