A Dell board committee has rejected a voting rule change Michael Dell attached to an increased buyout offer for the struggling PC maker he founded.
A group led by Michael Dell and the investment firm Silver Lake Partners last week raised its bid to buy out Dell Inc.'s other shareholders by a dime, to $13.75 per share. As part of that offer, the group said the bid's fate must be decided only by the shareholders who choose to vote either for or against the plan.
Under existing rules, shareholders who don't vote count as "no" votes.
A special committee of company board members said in a short letter, dated Tuesday, to Chairman and CEO Michael Dell that it wouldn't accept the new proposal. But the company did say it would establish a new date for a vote on the offer of $13.75 per share under the existing rule for voting.
"A new record date would enable the many shareholders who bought their shares after June 3, 2013 to vote on the transaction while giving all shareholders more time to reflect on where their best interests lie in light of the improved offer," the letter stated.
Otherwise, the committee said it was ready to proceed Friday with a vote on the $13.65 offer. That vote has already been delayed a couple times.
Dell spokesman David Frink declined to comment on the letter. He said Michael Dell and Silver Lake would review it.
Dell's offer drew criticism from Carl Icahn and the investment firm Southeastern Asset Management, two major investors in the company that have pitched an alternative to the bid led by Michael Dell. That alternative would involve removing Michael Dell as CEO.
Icahn and Southeastern said earlier this week in a letter to the board committee that the voting rules change would prevent investors from passively rejecting Michael Dell's offer. They said they believe that many Dell stockholders who oppose the deal may have not voted because they knew their inaction would count as a vote against the merger.
Michael Dell and Silver Lake have said their latest offer represented their "best and final proposal."
Dell's founder first pitched a buyout plan earlier this year. He says that he can turn around Dell by spending heavily to build better tablets, while also diversifying into more profitable areas of technology, such as business software and data storage. Those changes likely will be tumultuous and easier to tolerate if the company no longer has to answer to other shareholders.
Dell shares dropped 2.6 percent, or33 cents, to $12.53 Wednesday morning, while the tech-heavy Nasdaq composite rose.