Dell CEO Told to Boost Offer Value or Lose Chances of Going Private

From DailyTech: The founder and CEO of Dell Inc. could lose his company if he doesn't heed the warnings of a special committee of the board.

Michael Dell, who founded Dell Inc. in 1984, is trying to take the computer company private, but Dell's second largest shareholder -- Icahn -- is making that a bit more difficult with an investment-backed proposal of its own.

Dell, which is being backed by buyout partner Silver Lake Management LLC in this process, was told to up his offer from $24.4 billion in order to secure approval from investor-advisory firm Institutional Shareholder Services (ISS).

Reports have said that ISS is leaning against Dell's offer unless he increases it. Neither Dell nor Silver Lake have said whether they'll do so or not yet, but Dell's special committee of the board is pushing for Dell to make a larger offer.

Billionaire Carl Icahn, on the other hand, revealed this week that he provided $3.42 billion (66 percent) of the debt financing for the bid. Icahn, along with investment bank Jefferies & Co, have secured $5.2 billion total.

ISS hasn't made a final decision yet, but the odds seem stacked against Michael Dell for now if he doesn't provide a better offer. Banks financing the transaction are reportedly working on a contingency plan to hike up the offer now.

Dell has had a whirlwind of problems aside from issues with going private. In May, the company reported a 79 percent decline in profits, with net income falling to $130 million from $635 million compared to the same quarter of 2012. This is mainly due to a shrinking PC market.

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