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ISS tells Dell shareholders to vote for $24.4B founder buyout

The proxy advisory firm asserts that the transaction presented by founder Michael Dell and Silver Lake Partners is in the best interests of shareholders.


Michael Dell and Silver Lake Partners have received a key endorsement for their $24.4 billion buyout offer for Dell.

Institutional Shareholders Services (ISS), a firm that advises public company shareholders on proxy voting and corporate governance, has endorsed the deal that Michael Dell and Silver Lake have offered to take the company private.

Under the terms of the deal, Dell shareholders will receive $13.65 per share for all outstanding stock not currently held by Michael Dell. After obtaining the shares, Dell and Silver Lake will take the company private and plan to focus its operation on several core functions, including cloud computing.

Here's what the ISS had to say about the deal:

After evaluating the risk of accepting the offer -- truncation of value if the business transformation is successful - versus the risk of rejecting the offer -- meaningful loss of value if the business transformation falters -- ISS recommends clients vote FOR this transaction, which offers a 25.5% premium to the unaffected share price, provides certainty of value, and transfers the risk of the deteriorating PC business and the company's on-going business transformation to the buyout group.

Activist investor Carl Icahn won't be pleased with the ISS endorsement. He has proposed an alternative to the Dell plan under which he and partner Southeastern Asset Management acquire 72 percent of the company's outstanding shares and pay stockholders a special dividend. Icahn argues that his deal would provide far more value to shareholders.

Dell shareholders will vote on the $24.4 billion transaction next week.