Before Dell buyout, a final shareholders meeting [Austin American-Statesman]
(Austin American-Statesman (TX) Via Acquire Media NewsEdge) Oct. 15--Dell Inc. is well on its way to completing its $24 billion-plus management buyout and going private.
But first, there's the matter of an annual shareholders meeting set for Thursday morning in Round Rock.
The meeting, which is expected to result in the election of a management slate of company directors, is only expected to last a half hour or so.
Then the company goes back to finishing up the financing and other details for the buyout, which is expected to be completed by the end of October.
Almost all the potential drama has gone from the shareholders meeting because Dell's stockholders approved the buyout on Sept. 12, setting the stage for founder and CEO Michael Dell and his financial ally, Silver Lake Partners, to buy the company and take it private. At one time, billionaire investor activist Carl Icahn had threatened to nominate his own slate of directors as he maneuvered for control of the company. But Icahn formally bowed out of the Dell fight in September.
That makes the shareholders meeting pretty much a formality after a months-long struggle between backers and antagonists of the buyout that had forced the Dell board to change the date of a shareholders vote on the deal three times and ultimately to change the rules for approval.
"After all the excitement, this (annual meeting) is pretty boring," said analyst Roger Kay with Endpoint Technologies Associates. "Once the company leaves the public domain, it becomes far less interesting for investors."
While Dell is almost sure to go private, the computer company already has embarked on its business makeover. It has made stronger overtures to software giant Oracle Corp., which Dell expects will become a tighter business alliance.
And the company has introduced a new lineup of personal computers and tablets, which also is part of the new plan. Even though Dell expects to gear much of its business future around the information technology needs of corporate and government agency customers, it very much intends to compete with "client" products -- PCs and notebooks -- that businesses need for their employees.
"They are going to do what they said they would do, which is accelerate their business transition," Kay said. "They are freer to deploy their resources as they see fit."
Kay and other analysts expect Dell's makeover as a private company will take several years to accomplish. If and when that transformation does occur and Dell becomes a considerably stronger supplier of advanced hardware, software and services to corporate customers, then analysts expect the company will seek a public stock offering once again. Such a move could take five years or longer, some analysts estimate.
Dell won't retire from public view, though. The company's Dell World trade show remains on the calendar for Dec. 11-13 in Austin. That is expected to be a key platform for the company to communicate its product plans and strategies to key customers and business partners.
But the company probably will stop issuing quarterly financial reports to the investor community.
"The company has been freed from the vicious three-month financial cycle," Kay said. "It is such a distraction."
Kay expects Dell will try to make more acquisitions to bolster its portfolio of advanced software for corporate customers. Its biggest software acquisition to date was the $2.4 billion it paid for California-based Quest Software last year.
While Dell works on its own reorganization, analysts expect the company will continue to compete with arch-rival Hewlett-Packard Co. HP is going through its own internal remaking while remaining a public company.
"Those two (Dell and HP) are the American companies left standing," said Kay, who notes that IBM Corp., the best established information technology provider for many of the world's biggest companies, remains generally above the fray of the two PC makers. IBM, which generates most of its revenue from software and services sales, sold its personal computer business to China's Lenovo Group in 2004.
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