Michael Dell raises bid for Dell - by ten cents - then postpones vote to decide company's future

Ten cent 'bonus' only stands if non-voting shares are removed from the equation

The vote to decide the future of computer maker Dell has been postponed for second time after founder and CEO Michael Dell raised his offer - albeit by just 10 cents, or less than one per cent.

The change to the terms came just hours before Dell's offer was to be voted on by the special board committee established by the company to review the competing offers for the company.

At the same time, however, Michael Dell demanded that the increased bid would only be applicable if the voting threshold for shareholder approval were lowered. This would mean taking out non-voting shares that would currently automatically be counted as a vote against the deal.

"Currently, over 25 per cent of the unaffiliated shares have not voted. This means that even if a majority of the unaffiliated shares that vote on the transaction want to accept our offer, the will of the majority may be defeated by the shares that do not vote. I think this is clearly unfair," wrote Dell in an open letter to shareholders.

According to newswire Reuters, while Dell is offering $13.75 per share, the committee want at least $14 per share. However, it adds, Silver Lake, the private equity group backing Dell's bid to take the company he founded private, will not raise its offer.

It is the second postponement to the vote to decide the company's future, after the first vote scheduled for 18 July was put back. The vote will now be held on Friday 2 August.

However, the late change to the voting process, while legal, may provoke a court challenge. Dell is legally obliged to fairly protect the interests of all shareholders equally, and disgruntled shareholders could argue that the rule change is solely in the interests of Michael Dell and Silver Lake.

At the same time, documents uncovered by the New York Times indicate that the initial plans of Michael Dell and Silver Lake included copying some of the tax avoidance practices of Apple, Google and other technology companies.

"The proposed strategy involved conducting the buyout through a newly created foreign entity that would have effectively owned Dell. Under US tax laws, that foreign entity would have legally escaped US corporate taxes because it would have been a partnership for US tax purposes," read a strategy document prepared for the bid by banking giant JP Morgan Chase.