AUSTIN (KXAN) - Round Rock-based Dell and the company's founder reached a new $25 billion dollar deal on Friday to take the computer company private.
Michael Dell boosted his bid by offering a special dividend on top of a 10-cent increase in the sale price to $13.75 a share.
Now everyone who follows Dell is wondering what it all means.
"I think this shows they are willing going a little bit further in terms of getting people to sign on. And that's the offer they are putting to the table that will be voted on in September," said professor Ehud Ronn of the University of Texas McCombs School of Business.
Dr. Ronn believes the offer from Michael Dell will likely prevail.
"My sense is if this offer in September were to fail, prices would fall on Dell stock considerably and I think stockholders would be unhappy," Ronn continued.
Investor Carl Ichan owns nearly 9 percent of Dell stock and is continuing a lawsuit. Ichan claims Michael Dell's offer is an insult to shareholders.
"Mr. Icahn obviously wants to maximize his investment. And that is perfectly legitimate. One of the things he could do is submit an offer of his own. But he would rather take this route in which he would like them to sweeten their offer," Ronn noted.
Dr. Ronn says Michael Dell wants to maximize the value of the company by not having to be sensitive to pressure from stockholders.
That could initially mean layoffs for Dell employees.
"Medium and long term they may actually grow their employment once they are successful in their new strategy. But regrettably in the short term it may mean fewer employees in the Central Texas area," the professor said.
Michael Dell's story has been part of the business folklore in Central Texas for decades. As a University of Texas student in 1983, he assembled and sold computers from his dorm room at Dobie Center.
Today the Dell name is synonymous with philanthropy in Austin and especially at UT.
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