ROUND ROCK, Texas — Dell delayed Thursday’s vote on founder Michael Dell’s plan to take the slumping computer maker private in a sign the board needs more time to rally support.
Dell called a special shareholders meeting to order, then quickly adjourned it without a formal vote of the $24.4 billion buyout offer from Michael Dell and a group led by investment firm Silver Lake. It was rescheduled for Wednesday at the company’s headquarters in Round Rock, Texas.
The postponement is a significant setback for Michael Dell and the company’s board, which has spent the past five months trying to persuade shareholders to approve the buyout proposal. Supporters believe Dell Inc. stands a better chance of turning around if it can make long-term strategic decisions without worrying about meeting Wall Street’s quarter-to-quarter expectations.
The mounting opposition to the deal is likely to increase the pressure on Michael Dell and Silver Lake to sweeten their offer. Dell’s stock rose 32 cents, or 2.5 percent, to $13.20 in morning trading after the delay was announced.
It’s unclear whether Silver Lake and other lenders financing the bid will be willing to raise the stakes, given a deepening slump in the PC market that has been causing Dell’s earnings to crumble. PC sales have been falling as people delay replacing traditional computers and spend their money instead on the latest smartphones and tablets. Tablets are expected to outsell laptops this year.
Michael Dell, who is Dell’s CEO, is hoping to evolve the company into a more diversified seller of technology services, business software and high-end computers — much the way IBM Corp. had successfully transformed itself in the 1990s.
The delay is a vindication for two major Dell shareholders, Carl Icahn and his Southeastern Asset Management fund. They own a combined 13 percent of Dell and have been leading the mutiny against the proposed deal. They have argued the price undervalues Dell’s long-term prospects, giving Michael Dell and his backers an unfair opportunity to profit from a turnaround.
Many shareholders voted by proxy ahead of time, giving the company an indication of the results had the vote been formally recorded Thursday. In a statement, Dell said the delay was done to give the board more time to solicit votes.