Dell bd. backs CEO, stiffs Carl

Dell’s board urged shareholders to vote for a $24.4 billion buyout by founder Michael Dell and Silver Lake Management at a meeting set for July 18, continuing to dismiss a rival bid by billionaire Carl Icahn as inferior.

After contacting more than 70 potential strategic and financial buyers, Dell determined that Michael Dell’s offer “is the best alternative available — in a challenging business environment,” the company said in a filing yesterday. The deal requires approval by a majority of shareholders, excluding Chief Executive Officer Dell, who has a 15.6 percent stake.

Michael Dell and Silver Lake’s push to take the world’s third-largest PC-maker private has met with resistance from some of the company’s largest investors. Icahn, who proposed an alternative buyout plan that would maintain Dell as a publicly traded company, is expected to keep pressing shareholders to reject CEO Dell’s bid, according to Jeffrey Fidacaro, an analyst at Monness Crespi Hardt & Co.

“They’ve got some work ahead of them to secure this vote,” Fidacaro said. “The swing vote could be the mutual funds, index funds and exchange-traded funds who usually go by a third-party opinion.”

The Silver Lake-led group offered $13.65 a share for Round Rock, Texas-based Dell.

Dell rose less than 1 percent to $13.36 at the close in New York.

Icahn and partner Southeastern Asset Management proposed a competing offer that would pay investors $12 a share in cash or stock while letting them retain stakes in a public company.

Icahn, who along with Southeastern owns almost 13 percent of Dell shares, said this month that he would look to replace Michael Dell as CEO if he prevails.

Southeastern, Dell’s largest outside investor, urged other shareholders not to take action on the buyout offer by Dell and Silver Lake.

Southeastern said in an open letter yesterday that it “will be making a proxy statement available in the near future.”