“ISS recommends clients vote for this transaction, which offers a 25.5 percent premium to the unaffected share price, provides certainty of value, and transfers the risk of the deteriorating PC business and the company’s on-going business transformation to the buyout group,” ISS said in a statement released Monday.
Dell, along with investment firm Silver Lake Partners, wants to buy out the company for $13.65 per share, or roughly $24.4 billion. Going private will allow Dell to work on transitioning its business away from the faltering PC market and further into enterprise software and services, without the pressures public companies face from Wall Street and investors.
But Dell’s bid has come under fire from critics, including investor Carl Icahn, who believe it is too low. Icahn has also made counter offers for the company.
A special committee of Dell board members said Monday it was “pleased” by ISS’s recommendation, which follows reports that Silver Lake was having second thoughts about the deal.
“Over the course of an exhaustive 10-month process, the committee has thoroughly reviewed Dell’s existing business plan as it seeks to transform its business model and various alternatives in support of that transformation,” the committee said in a statement. “Given the company’s business challenges, intensifying competition and deteriorating industry trends, a sale at $13.65 per share in cash provides the highest value and greatest certainty of any available alternative.”
Dell shareholders are supposed to vote on the transaction July 18.