Dell $24.4 Billion Buyout Plan Is a Nail-Biter as Vote Looms

　　When Michael Dell announced a plan in February to take Dell Inc. (DELL) private, today was supposed to be anticlimactic -- the day when shareholders would easily bless the buyout of the computer maker he founded 29 years ago.
　　Instead, the run-up to the vote on Dell’s $24.4 billion proposal has turned into a nail-biting game of chicken that has left Dell’s side racing to lobby shareholders who consider the bid too low. Rather than ending with a victory dance for Dell, today may yield a decision to postpone the vote deadline to give him and private-equity firm Silver Lake Management LLC more time to convince investors of the merits of the leveraged buyout -- or to simply increase the $13.65-per-share bid.
　　Boosting the offer to $14 a share might suffice, said Angelo Zino, an analyst at Standard & Poor’s Financial Services in New York.
　　“If you get the $14 offer from Michael Dell, it’s enough to quiet enough of the shareholders out there and it’s enough to get the deal done,” he said.
　　On the eve of the vote, Chief Executive Officer Dell and Silver Lake weren’t budging, considering $13.65 their best and final offer, according to people familiar with the duo.
　　That position leaves Dell’s shareholders in a quandary: If they reject the deal, the stock, now at $12.88, could drop on concerns about Dell’s weakness in personal computers and its inability to compete with bigger companies in the corporate technology market. In Germany today, Dell traded at the equivalent of $12.83 at 10:00 a.m. in Frankfurt.
　　‘Shares Tank’
　　“You would see the shares tank, post a turn-down of $13.65,” said Zino. Michael Dell predicts the stock will fall to about $7.90 a share, based on trailing earnings, if the LBO is voted down, according to a person with direct knowledge of his thinking.
　　A more likely scenario is that the special committee of Dell’s board that is considering the bid postpones the vote, possibly by adjourning the meeting right after it starts, a person with knowledge of the matter has said.
　　A delay would prolong Dell’s struggle for control against billionaire investor Carl Icahn, who has pushed for months for the founder to raise his bid and has offered his own proposal. Icahn’s rival offer of $14 would allow Dell shareholders to retain equity in a publicly traded portion of the company, plus a warrant that could be exchanged for additional stock should Dell climb higher than $20.
　　Open Letter
　　Icahn and Southeastern Asset Management Inc., which holds a 3.98 percent Dell stake, urged the board not to postpone the vote in an open letter to shareholders yesterday.
　　“If the special committee doesn’t like the $13.65 price, then as we see it, they should not have approved the Michael Dell/Silver Lake transaction in the first place,” they said in the letter.
　　Phone and Internet voting is scheduled to close a minute before midnight New York time, and live polling will close about 15 to 20 minutes after the meeting starts, said David Frink, a Dell spokesman.
　　For Michael Dell, a loss to Icahn would be particularly irksome, according to a person familiar with his thinking. He understood when he started working on the idea of taking Dell private that another, higher bidder could win out. That would have been an elegant way to exit the company that carries his name by creating value for all stakeholders, the person said.
　　The last thing Michael Dell expected, the person said, was the prospect of losing the company to Icahn, whom he considers a corporate raider.
　　Cash, Warrants
　　Icahn and Southeastern say their proposal values Dell at about $15.50 to $18 a share. The special committee of the board calculated that if Icahn’s proposal gets consummated, each shareholder would get $9.99 in cash and 0.18 warrants.
　　Michael Dell, meantime, says a plan like Icahn’s would add substantial debt, curb financial flexibility and “hurt the company’s ability to weather an economic or business downturn,” the CEO said in a June 21 regulatory filing.
　　Another person with direct knowledge of the situation said the special committee believes the buyout group has room to raise the offer, and hasn’t been formally told by the buyers that their bid is best and final. Adjourning the vote would give shareholders, who can recast their votes up until the last minute, more time to change their minds, according to the person.
　　“Instead of executing the vote and maybe not getting it passed, Dell may need to postpone the vote until they know it could get passed through,” said Jeff Fidacaro, an analyst at Monness Crespi Hardt & Co. in New York.
　　Under Pressure
　　The stock will probably remain under pressure until the final decision, while staff may be tempted to jump ship. The company announced the resignation of Kelly McGinnis, Dell’s global head of communications, in an internal memo earlier this week.
　　Victory for Silver Lake and Dell would mean investors cash out while the company goes private and Michael Dell embarks on a turnaround of the business he founded in a university dormitory in 1984.
　　CEO Dell wants to take the company out of public hands to gain more freedom to transform the PC maker into a leaner, nimbler provider of data-center gear and corporate software.
　　A stream of disappointing earnings, dismal financial projections, endorsements from influential shareholder-advisory firms, and a steady campaign by Dell’s board has persuaded many investors that there are no other palatable options, said Sachin Shah, a merger-arbitrage strategist at Albert Fried & Co.
　　“You can’t say, ‘I’m not voting for the deal,’ and then see the stock decline,” said Shah, whose New York firm has clients who collectively own millions of Dell shares.
　　Dell’s Prospects
　　Icahn, meantime, is offering shareholders a chance to participate in the company’s recovery, asking them to forgo the buyout’s quick money and put their faith in Dell’s prospects -- even though that may mean tolerating the risk of a further decline in the shares.
　　To win the day, the buyout needs approval from a majority of holders, excluding Michael Dell, who owns a 15.6 percent stake. Yet investors that hold at least 20 percent of the stock have voiced opposition to the deal, saying it undervalues the company’s prospects, and some have thrown their weight behind Icahn’s plan. Shareholders who abstain will be counted as voting against the deal.
　　‘Attractive Gain’
　　Some investors have already resigned themselves to the offer that was initially outlined in February.
　　“We would like to see this go through in order to avoid the likely sudden drop in share price and realize an attractive gain,” Kyle Timmermann, a portfolio manager at Parkway Advisors LP in Abilene, Texas, said in an e-mail. Parkway, which owns almost 12,000 Dell shares and $600,000 of the company’s bonds, advises insurance companies on investments.
　　Other shareholders have remained steadfast in their view that Dell and Silver Lake undervalued the company. Case in point: Yacktman Asset Management Co., based in Austin, Texas. According to its latest filing, Yacktman owns 14.9 million Dell shares. While Yacktman would profit by taking the Dell-Silver Lake buyout, the firm is voting against the deal and supporting Icahn and Southeastern’s alternative proposal.
　　“It’s hard to find things to invest in, and we’d rather own this than cash,” said Stephen Yacktman, co-chief investment officer.
　　Buybacks, Acquisitions
　　Dell has destroyed value by buying back shares at too high a price and overpaying for acquisitions, including computer-services company Perot Systems Corp., data-storage company Compellent Technologies Inc. and software maker SecureWorks Inc., Yacktman said.
　　BlackRock Inc., which has a 4.4 percent stake in the third-largest PC maker, voted against the buyout, according to a person with knowledge of the matter.
　　Once the world’s top PC maker, Dell has become a patchwork of desktops and laptops, tablets, enterprise software and data-center gear thanks to a slew of acquisitions since 2007. Sales (DELL) and profit are declining, and the company is projected to generate less net income this fiscal year -- $1.44 billion -- than it did in 1999 on a third of the sales.
　　Dell shares, once an engine of wealth creation for investors and trading higher than $25 before the 2008 financial crisis, were at less than $9 last November. PC shipments, which account for more than half of Dell’s sales, dropped 10.9 percent industrywide in the second quarter, their fifth straight period of decline, market researcher Gartner Inc. said last week. Many Dell investors want to take the sure money and avoid another swoon.
　　“Given the uncertain outlook, a buyout would be in the company’s best interest,” said Bill Kreher, an analyst at Edward Jones & Co. who has a hold rating on the shares.
　　Investor Meetings
　　The company’s committee has met with major shareholders to seek backing for the buyout, and Michael Dell has attended some meetings with key investors, said a person familiar with the matter. Dell’s proxy advisers have also been calling small investors through their brokers and at home to ensure a favorable turnout, another person said.
　　CEO Dell and Silver Lake’s bid picked up some momentum earlier this month when Institutional Shareholder Services Inc., an influential shareholder-advisory firm, recommended investors support the deal. Securing ISS’s endorsement was a key win for the buyout team. Glass Lewis & Co. also backed the bid. Retail shareholders tend to follow the recommendation of the board, which in this case supports the deal.
　　“From a public-company shareholder’s perspective, if your CEO is willing to buy your falling knife for the privilege of catching it, there is probably a price at which you should let him,” ISS said.

Windows tablets just isn’t very superior

　　Tablets based on Microsoft’s Windows eight and Windows RT operating systems have struggled to gain traction so far and Paul Thurrott of the Supersite for Windows says there’s an incredibly uncomplicated explanation for this: The initial generation of Windows tablets just isn’t very superior. To be clear, Thurrott says that there are numerous touch screen Windows 8 PCs and ultrabooks that happen to be really worthy of users’ time and that shouldn’t be overlooked. But in relation to pure tablets, he deems that every single one particular is “simply to flawed to recommend” to any person serious about obtaining one.

　　“Looking about my personal workplace, this can be what I see,” Thurrott explains. “A Surface RT which is attractive and light and gets good battery life but is worthless and frustrating in use due to its horrible functionality. A Surface Pro that may be thick and heavy and gets only four.five hours of battery life when offering the weird mixture of a small screen using a really high resolution. A Samsung ATIV Smart Pc 500T (Clover Trail based) that will be laughable from a efficiency perspective if it weren’t for that Surface RT. (Basically, it is still terrible.) That 700T that won’t charge any longer unless I plug the energy cord in to the tablet itself … which, wait for it, you cannot do when the keyboard is connected.”
　　Of course, the initial round of Android-based tablets were similarly lackluster when compared with Apple’s iPad, so it’s not as though Windows eight is doomed as a tablet operating program. It does recommend, however, that Microsoft and its OEM partners will need to put a lot of effort into adding superior performance and worth to their tablets, related windows 7 professional full retail to how Nokia has attempted to create Windows Phone eight seem a lot more cutting-edge together with the inclusion of its industry-best 41-megapixel smartphone camera within the Lumia 1020.
　　Thurrott is optimistic that the following generation of Windows tablets is going to be a significant improvement over the existing generation since improvements to each hardware and software will make the devices a lot more palatable for buyers.
　　“Things are going to have better,” he concludes. “Intel’s new generation Core processors, codenamed Haswell, seem to have solved the battery life issue. And Windows eight.1 appears to resolve many with the troubles customers have highlighted in Windows eight, such as desktop show scaling. Each of those improvements recommend to me that waiting is in order, as Haswell- and Windows eight.1-based tablets will be plentiful in just a number of months.”

Microsoft buries webTV as internet television struggles continue

　　Microsoft is burying webTV, the service which was equally notable for being an internet television pioneer and for being the first of two decades worth of subsequent failures at such an effort. WebTV was followed by products ranging from Apple TV to Google TV, none of which resonated with the mainstream either. Microsoft tried to keep webTV alive over the years, renaming it to MSN TV to no avail. And now it perishes at a time when few are aware it ever existed, and even fewer were aware that it was still around. Yet the future of internet television may still be around the corner.
　　Apple is preparing to build its Apple TV technology directly into televison sets in the hopes of putting it in the hands of more consumers. Samsung just acquired Boxee, yet another internet televison niche, in an effort to go head to head with Apple. And Google is far from done trying. But the jury is still out as to whether the mainstream public wants web surfing and television on the same device. Renting a digital movie on a TV set, or watching a TV episode in iTunes on a computer, is one thing. Marrying the two appliances entirely is another. Most of the public have shown they prefer to maintain separate devices with only casual crossover. But attitudes on the subject have shown they can evolve.
　　Around the time Microsoft was launching webTV, Steve Jobs correctly predicted it would fail, positing that people used their computer for when their brain was turned on and their televison when it was turned off. But by the end of his life, Jobs was claiming he’d figured out the ideal interface for marrying the two devices, which Apple still has yet to reveal. By shutting down webTV, Microsoft is either admitting that a market it helped pioneer was only ever a solution in search of a problem, or getting out just when the getting is about to get good.

Finally to be certain that user information is correctly shielded

　　Evernote currently introduced an update for its Home windows Contact software that provides a redesigned hub website page, support for its Small business merchandise, and two-step verification to its users. When a shift that may look minor, the organization phone calls them considerable that can help generate the “best-looking, indigenous experience” on Home windows products.
　　For the people users accessing Evernote with a Home windows Floor, phone, or pill product, a different commence display will likely be shown. The corporation says that it's placed all of its main navigation products and account content that a person could need to have ideal on the single monitor.
　　The display screen has now been sorted into buy office professional plus 2010 retail pack several sections, which include “create”, which ought to quickly allow you to make notes, snapshots, or start out having a file attachment. Other sections over the screen consist of shortcuts, your latest action, as well as a record within your notes, notebooks, and tags.
　　Realistically, this really is much more of an aesthetic transform if anything. None of these options are completely new.
　　Evernote Business has become supported on the Windows Contact application, bringing it to par with its Android and iOS counterparts. Now, Evernote says users should be able to combine with their company’s Company Library with the Get A lot more portion. Throughout the notebook area about the hub website page, people will see not just their individual contents, but also individuals for their organization.
　　Finally, to be certain that user information is correctly shielded, Evernote is employing two-step verification. This security evaluate was introduced months after the provider suffered an unauthorized breach in March, which resulted during the corporation resetting its 50 million-plus users’ passwords. In May possibly, Evernote explained that two-step verification can be at first accessible for its quality and Business enterprise users. So although Windows Touch app buyers have that function, you may not be truly able to work with it.
　　Two-step verification provides a further protection move to logging in to an Evernote account, and makes certain that the individual logging into Evernote would be the rightful owner of that specific account. The login course of action with two-step verification enabled demands a username, password and exclusive code that’s sent on the user’s cell phone, produced by the Google Authenticator application or printed out from the person beforehand.