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The European Union has given its approval for Michael Dell, the founder of US computer manufacturer Dell, to buy out the company should shareholders accept his bid, the bloc’s executive announced today.
Dell’s shareholders are due on July 18 to vote on Michael Dell’s $ 24.4 billion leveraged buyout offer, backed by a consortium of private equity companies, after the move was challenged by activist shareholder Carl Icahn and his allies.
The plan would have to be approved by a majority of shareholders, excluding Michael Dell, who owns 15.6 per cent of the company’s stock.
Icahn and his partners own almost 13 per cent of Dell shares.
Their rival proposal would fund a buyout using existing cash and about $ 5.2 billion in new debt.
Should Michael Dell succeed in his bid, the European Commission indicated Friday that the acquisition would not run into any problems under EU merger regulations.
An ongoing slump in PC sales has taken a toll on Dell, the world’s third-largest PC maker. It reported a 79 per cent year-on-year plunge in first-quarter profits last month to $ 130 million. Sales dipped 2 per cent to $ 14.1 billion.
Dell’s decline in earnings and sales comes amid a shift in demand to smartphones and tablets. The company is seeking to turn itself around by accelerating its switch towards selling more products and services for corporate data centres.
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