Dell argued his case in a presentation filed with the US Securities and Exchange Commission yesterday, saying that keeping any part of the company public while it transformed itself would hurt Dell’s stock price.
That in turn would threaten customer perception and make it more difficult to keep employees, he said.
If his buyout proposal fails to sway shareholders, he reiterated that he will remain with the company but said he “will also oppose the kind of imprudent leveraged recapitalisation that has been suggested by certain other parties.”
Activist shareholder Carl Icahn, who says Dell’s offer undervalues the company, on Tuesday promised shareholders that the company would buy back up to $16bn of stock if they joined his campaign to stop the computer maker from going private.
Dell could fund a tender offer for its own shares with debt financing, Icahn said.
Michael Dell and private equity firm Silver Lake want shareholders to accept a $24.4bn bid, aimed at taking the company private while it transforms itself into a technology consultant for large companies, along the lines of International Business Machines Corp.
Icahn and his ally Southeastern Asset Management have repeatedly decried the management-led buyout as too cheaply priced. While Icahn is now the second largest shareholder, behind only Michael Dell, he faces a tough challenge to swing the majority of Dell investors to his side.
Dell is badly struggling to compete in an era of cloud computing and mobile devices, a challenge faced by other venerable tech giants, like Hewlett-Packard, Microsoft and IBM. Investors may simply wish for an exit.
The proxy meeting where investors vote on the proposal will happen next month. Some institutional investors will be swayed by the decision from proxy adviser Institutional Shareholder Services.