Posts Tagged ‘public company’
Founder and CEO Michael Dell is one step closer to his own private company again after 65% of Dell shareholders approved a 25 billion dollar buyout. Dell stockholders will receive $13.75 in cash for each share and a special cash dividend of 13 cents per share, totaling $13.88. Michael Dell and investment firm Silver Lake Partners are working together on the deal.
The buyout had been previously held up by activist investor Carl Icahn who wanted shareholders to demand a better deal. Icahn admitted defeat earlier this week while still criticizing the deal.
Still, the minority shareholders who voted against the deal may file suit if they think the shares should be valued at more than the buyout price. However, that case would take many years, and it seems like the benefits of gaining a few more dollars per share would be outweighed by the costs and time involved in a successful lawsuit.
Michael Dell faces a daunting task to turn around Dell’s slumping growth. But these types of public-to-private deals might be a signal for things to come. The benefits of remaining public versus a private, particularly given a firm’s ability to raise private capital more easily (i.e. see Facebook pre IPO), will continue to be a question for both established and startups alike.
Who wants to be a public company?
As described in this Bloomberg article, shareholders have sued the directors of Onyx Pharmaceuticals for a breach of their fiduciary duty in approving a merger with Amgen Inc. The related SEC filings by Onyx and Amgen provide a nice window into the burdens of being a public company.
On Aug. 26, Onyx filed an 8-K reporting the consummation of the merger agreement just two days earlier (and an identical Form SC to-C, “Written communication relating to an issuer or third party”); two Schedule 14D-9’s providing required disclosures by an issuer regarding a third-party tender offer and a letter to Onyx customers apprising them of the merger; and a tender offer statement attaching the transcript and slideshow presentation for an Aug. 26 conference call with analysts. On Aug. 27, it filed another Schedule 14D-9 comprising a Q&A on the merger for its employees. On Aug. 26, Amgen filed its 8-K (and matching Form SC to-C) on the merger, and its tender offer statement on the Aug. 26 analyst call. On Sep. 3, both Onyx and Amgen filed a statement of the tender offer on Schedule TO, and Onyx filed its shareholder solicitation and recommendations on Schedule 14D-9.
Between Aug. 28 and Sep. 4, various plaintiffs filed six class actions alleging a breach of fiduciary duty by the Onyx directors. On Friday, Sep. 6, Onyx and Amgen filed amended Schedule 14D-9s that briefly describe the lawsuits. Stay tuned for Monday’s filings!