Institutional Shareholder Services, the biggest proxy advisory firm, recommended on Monday that Dell investors accept Michael S. Dell’s $24.4 billion leveraged buyout offer.
The recommendation is something of a surprise and an important development for the proposed transaction. Advisers to both the buyers and to a special committee of Dell’s board had assumed that the report would most likely be unfavorable to the deal.
I.S.S. cited “the 25.5 percent premium to the unaffected share price, the certainty of value provided by the all-cash consideration, and the fact that the transaction would transfer to the buyout group the risk of the deteriorating PC business and the company’s ongoing business transformation.†Mr. Dell and Silver Lake Management have offered $13.65 a share.
Mr. Dell, who owns a 16 percent stake, faces an alternative proposal by the billionaire Carl C. Icahn and the asset management firm Southeastern Asset Management. Their proposed buyback of 1.1 billion shares at $14 each values Dell at about 12 times earnings before interest, depreciation and amortization.
